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3 years ago

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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

ecoverable units would be 500,000. During the year, 40,000 units were mined and 25,000 units were sold for $800,000. Dillon incurred expenses during 2019 of $500,000. The percentage depletion rate is 22%. Dillon's depletion deduction for 2019 would be:

1 answer:

lutik1710 [3]3 years ago

7 0

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)

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3 years ago

The Sealing Company has 1,500 bonds outstanding that are selling for $1,060 each. The company also has 5,000 shares of preferred

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The weight of the common stock as it relates to the firm's weighted average cost of capital is <u>35%</u>.

<h3>What is the weighted average cost of capital?</h3>

The weighted average cost of capital computes a firm's cost of capital based on the firm's average cost of capital from all sources: common stock, preferred stock, bonds, and other forms of debt.

The weight of the common stock can be determined by dividing the common stock market value by the total capitalization from all sources.

<h3>Data and Calculations:</h3>

Outstanding:

Bonds payable = $1,590,000 (1,500 x $1,060)

Preferred stock = $160,000 (5,000 x $32)

Common stock = $936,000 (36,000 x $26)

Total debts and equity = $2,686,000

Weight of common stock = 35% ($936,000/$2,686,000 x 100)

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2 years ago

You just received an offer in the mail to transfer your $5,000 balance from your current credit card, which charges an annual ra

NARA [144]

Answer:

number of payment is 3.05 payment

so correct option is b 3.05 payments

Explanation:

balance = $5000

annual rate r1 = 18.7 % = $\frac{0.187}{12}$ = 0.01558

credit card charging r2 = 5.9% = $\frac{0.059}{12}$ = 0.004917

payments P = $250 month

to find out

How many fewer payments will you have to make to pay off this debt if you transfer the balance to the new card

solution

we first find time t both rate by total balance formula that is

balance = $P * \frac{1-(1+r)^{-t}}{r}$ ...........................1

here P is payment and t is time and r is rate

put here all value and find t for r1

balance = $P * \frac{1-(1+r)^{-t}}{r}$

5000 = $250 * \frac{1-(1+0.01558)^{-t}}{0.01558}$

take log both side

log 0.6884 = log 1 - log $(1+0.01558)^{t}$

t = 24.1519 .................2

and now put here all value and find t for r2

balance = $P * \frac{1-(1+r)^{-t}}{r}$

5000 = $250 * \frac{1-(1+0.00492)^{-t}}{0.00492}$

take log both side

log 0.9016 = log 1 - log $(1+0.00492)^{t}$

t = 21.1055 .....................3

so by equation 2 and 3

so no of payment will be 24.1519 - 21.1055

so number of payment is 3.05 payment

so correct option is b 3.05 payments

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3 years ago

At Rogopt, a multinational e-commerce site, the human resources department sends out emails to all its branches whenever there a

IgorLugansk [536]

Answer:

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Explanation:

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3 years ago

Milo has the following year-end account balances: Accounts Receivable, $5,000; Supplies, $12,000; Equipment, $18,000; Accounts P

Trava [24]

Answer:

$25,000

Explanation:

Calculation for what the balance in the Cash account should be

First step is to calculate for the Total Assets excluding Cash

Total Assets excluding Cash = $5,000 + $12,000 + $18,000

Total Assets excluding Cash = $35,000

Second step is to find the Total Liabilities & shareholder's equity

Total Liabilities & shareholder's equity = $17,000 + $43,000

Total Liabilities & shareholder's equity == $60,000

Last step is to calculate for the cash balance using this formula

Cash balance = Total Liabilities and shareholder's equity - Total Assets (excluding cash)

Cash balance = $60,000 - $35,000

Cash balance = $25,000

Therefore the balance in the Cash account should be $25,000

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3 years ago