When a labor union and an employer cannot agree on the terms of a contract what often happens?

On January 15, 2019, Dillon purchased the rights to a mineral interest for $3,500,000. At that time, it was estimated that the r

lutik1710 [3]

Answer:

$175,000

Explanation:

Depletion per Unit =$3500000 / 500000 = $7 per unit

25,000 units were sold during the year.

There are two ways of figuring depletion on mineral property.

1. Cost Depletion

2. Percentage Depletion

Generally, we must use the method that gives you the larger deduction.

Calculation of Cost Depletion:

Cost Depletion = Units Sold * Depletion Rate = 25,000 units * $7 per unit = 175,000

Calculation of Percentage Depletion:

Percentage Depletion = Gross Income from Property During the Year * Depletion Rate = 800,000 * 22% = 176,000

Percentage Depletion cannot be more than 50% of net taxable income from the property.

Percentage Limit = (Sales - Expenses ) * 50% = (800,000 - 500,000) * 50% = 300000*50% = 150,000

Thus Percentage Depletion is limited to $150,000

Thus, the deduction is $175,000 (Higher to Cost or Percentage Depletion)

7 0

3 years ago

Montana Mining Co. pays $3,721,000 for an ore deposit containing 1,525,000 tons. The company installs machinery in the mine cost

Paraphin [41]

Answer:

Ore deposit depletion and Mining machinery depreciation Journal entries

Dr Depletion charge (Ore deposits) 405,528

Cr Accumulated depreciation 405,528

Dr Depletion charge (Ore deposits) 23,268

Cr Accumulated depreciation 23,268

Explanation:

Preparation of the year-end entries to record both the ore deposit depletion and the mining machinery depreciation of Montana Mining Co

Depletion of natural resources can be defined as the way in which the cost of natural resources is apportioned upto the period when it will be utilized which is why they are shown at cost in balance sheet.

The entry is to record depreciation charged on ore deposit depletion. Therefore To record this entry we have to debit depletion charges, and credit accumulated depreciation

Dr Depletion charge (Ore deposits) 405,528

Cr Accumulated depreciation 405,528

Computation of depletion cost per unit:

The depletion cost per unit can be calculated by dividing the net cost of the ore with the total units of capacity :

Depletion/units = Cost - Salvage/ Total unit of capacity

$3,721,000/1,525,000 tons

=$2.44

Hence, depletion per unit is $2.44.

Computation depletion amount on ore deposit:

The depletion amount on ore deposit can be calculated by multiplying the cost per depletion unit with the number of units utilized:

Depletion =Cost/Unit ×Units Utilized

$2.44×166,200 tones

=$405,528

Hence, depletion expenses on ore deposit amounts to $405,528.

The pass entry to record depreciation charged on mining machine :

Dr Depletion charge (Ore deposits) 23,268

Cr Accumulated depreciation 23,268

Computation of depreciation cost per unit:

The depletion cost per unit can be calculated by dividing the net cost of the ore with the total units of capacity :

Depletion/units = Cost - Salvage/ Total unit of capacity

$213,500/1,525,000 tons

=$0.14

Hence, depreciation per unit is $0.14.

Computation of depreciation amount on ore deposit:

The depletion amount on ore deposit can be calculated by multiplying the cost per depletion unit with the number of units utilized:

Depletion =Cost/Unit ×Units Utilized

$0.14×166,200 tones

=$23,268

Therefore the depreciation expenses on ore deposit amounts to $23,268

4 0

3 years ago

A client, age 67, owns his own home free and clear. The customer has an annual income of $25,000, mainly from social security an

FromTheMoon [43]

Answer:

The best recommendation to be made to this client is to do nothing.

Explanation:

Investment in stock is a highly risky investment because price of stock often fluctuates which can make an investor to lose a lot of money.

From the question, the client is already old at age 67 with a low income and he does not have any other liquid assets apart from the annual income of $25,000, mainly from social security and interest on funds held in a bank savings account.

Since losing so much money through investment in stock is not affordable to him, the best recommendation to be made to this client is to that he should do nothing.

3 0

3 years ago

Aarp expects agents offering aarp-branded products to demonstrate five key behaviors when interacting with customers. Aarp wants

Andre45 [30]

Answer: Effortless and inspiring

Explanation:

3 0

2 years ago

Major reasons for disclosure of deferred income tax information is (are)

Karolina [17]

Answer:

d. All of these answer choices are correct.

Explanation:

Is important to match the expenses with the revenues they are related. If for tax purposes we can deduct a full equipment value in one year. This means we are goung to pay higher income taxes in the future as we don't have the depreciation expense available for taxes porpuses.

The use of deferred incoem tax will be useful to knwo how much are the actual cash obligation and the expected value of the future cash obligations

6 0

3 years ago