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lbvjy [14]
3 years ago
5

On April 17, 2021, the Loadstone Mining Company purchased the rights to a coal mine. The purchase price plus additional costs ne

cessary to prepare the mine for extraction of the coal totaled $4,280,000. The company expects to extract 1,070,000 tons of coal during a four-year period. During 2021, 257,000 tons were extracted and sold immediately.
Required:
1. Calculate depletion for 2021.
2. Is depletion considered part of the product cost and included in the cost of inventory?
Business
1 answer:
nata0808 [166]3 years ago
5 0

Answer:

1. The depletion for 2021 is $1,028,000 .

2. No, depletion is not considered part of the product cost and isnt included in the cost of inventory

Explanation:

1. Depletion per ton = $4280000/1070000

                                  = $4 per ton

Depletion for 2021 = 257000 tons*$4

                                = $1,028,000

Therefore, The depletion for 2021 is $1,028,000 .

2. Depletion is not considered as part of product cost, It is shown as expense on income statement and reduced from the value of natural resource and so it is equivalent to depreciation of assets.

Therefore, No, depletion is not considered part of the product cost and isnt included in the cost of inventory

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Answer:

-$264,000

Explanation:

The net cash flows from investing activities for the year is presented below

Cash flow from investing activities

Purchase of equipment  -$260,000

Proceeds from the sale of equipment $87,000

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Net cash flow used by investing activities  -$264,000

The purchase is a cash outflow so it would be shown in a minus sign whereas sales is a cash inflow so it would be added

3 0
3 years ago
Harriet is currently in pay grade 8, but she is hoping to get a promotion so she can move into
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The type of job evaluation that is done if Harriet is hoping to move from grade 8 to 10 is known as job ranking.

Job ranking can be described as a type of classification that is based on the value or the hierarchy of a person in an organization.

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7 0
2 years ago
Gouda Company and Cheddar Company had the same sales, total costs, and income from operations for the current fiscal year; yet G
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Answer:

If both companies have the sames sales volume, total costs and income from operations, the reason why Gouda has a lower break even point is that their variable costs are lower. We use the contribution margin per unit to calculate the break even point and the contribution margin per unit = sales price - variable costs. The question states that total costs are equal, but it doesn't say anything about variable or fixed costs.

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3 0
3 years ago
5. Do a SWOT analysis for the business idea you chose in question 2 above. Describe at least 2 strengths, 2 weaknesses, 2 opport
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PART I

Answer:

The business idea is that of a Bakery that specializes in pastry that is mixed with fruits.

Explanation:

SWOT

Strengths

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  • 20 years experience in baking which translates to strong industry  knowledge

Weaknesses

  • Insufficient Equipment to go with
  • Weak or zero visibility for new business

Opportunities

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Threats

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Part II

Answer:

The persons I would give the business plan to are:

  • My family
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  • My banker of over 20 years

  1. I would give the business plan to my family members because they are the easiest people to raise funds from and also because family, can decide to contribute in cash or in-kind with no interest required.
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Cheers

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