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Lelu [443]
3 years ago
5

Miller Mining, a calendar-year corporation, purchased the rights to a copper mine on July 1, Year 1. Of the total purchase price

, $2.8 million was appropriately allocable to the copper. Estimated reserves were 800,000 tons of copper. Miller expects to extract and sell 10,000 tons of copper per month. Production began immediately. The selling price is $25 per ton. Miller uses percentage depletion (15%) for tax purposes. To aid production, Miller also purchased some new equipment on July 1, Year 1. The equipment cost $76,000 and had an estimated useful life of 8 years. After all the copper is removed from this mine, however, the equipment will be of no use to Miller and will be sold for an estimated $4,000. If sales and production conform to expectations, what is Miller’s depreciation expense on the new equipment for financial accounting purposes for the Year 1 calendar year?
a. $10,800
b. $5,400
c. $9,000
d. $4,500
Business
1 answer:
Mashcka [7]3 years ago
8 0

Answer:

d. $4,500

Explanation:

The computation of depreciation expense on the new equipment is shown below:-

For computing the depreciation expense on the new equipment first we need to find out the Depreciation per annum which is here below:-

Depreciation per annum = (Cost - Residual value) ÷ Life

= ($76,000 - $4,000) ÷ 8

= $72,000 ÷ 8

= $9,000

Depreciation for 1 year calendar (July 1 to Dec 31) = Depreciation per annum × 6 months ÷ Total number of months in a year

= $9,000 × 6 ÷ 12

= $4,500

So, the depreciation expenses for the year end up-to 31st Dec is $4,500

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Real property taxes are often assessed on the value of the property at the beginning of the year. when property is sold in the m
sergejj [24]

When property is sold in the middle of year, both the buyer and seller can deduct their pro rated portion of the property tax.

The property taxes are based on the assessed value of the property. So when the property tax is pro rated at the time of the transfer, both the buyer and seller can deduct their pro rated portion of the property tax.

Buyer and seller prorations are often applied during real estate closing transactions to divide the cost of expenses like property taxes. Thus, the buyer gets a deduction for the prorated amount of property tax due after closing, and the seller gets the same deduction for the taxes.

Hence, both the buyer and seller receives the deduction for the real property tax.

To learn more about property tax here:

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6 0
1 year ago
Layla Fox is a creative, imaginative, artistically sensitive individual who loves to take on new opportunities. She is a success
il63 [147K]

Answer: B. Openness to experience

Explanation: According to the Big Five personality factors, openness as a personality factor measures the level curiousness, imaginative and creative ability exhibited by an individual. An individual low on openness will be described as someone who would rather stick to a routine outline or experience or methodology. However, Layla fox described above could be said to exhibit high openness to experience given her will or zeal to try out new opportunities, imaginative and creative capability.

4 0
3 years ago
Oldham Corporation bases its predetermined overhead rate on a variable manufacturing overhead cost of $4.00 per machine-hour and
Rzqust [24]

Answer:

$21.42

Explanation:

The computation of fixed component in the predetermined overhead rate is shown below:-

Fixed component in the predetermined overhead rate = Fixed Overhead ÷ Machine Hours

= $87,822 ÷ 4,100

= $21.42

Therefore for computing the fixed component in the predetermined overhead rate we simply divide the fixed overhead by machine hours.

And all the other information i.e given is not relevant. Hence, ignored it

5 0
3 years ago
Which of the following items is included in the calculation of GDP? a.purchase of 100 shares of Microsoft stock b.purchase of a
Nady [450]

Answer:

The correct answer is option e.

Explanation:

The GDP of a country is the value of final goods and services produced in the geographical boundaries of a nation in a year. It does not include the value of intermediate goods produced. This is because it may lead to double counting. So the value of intermediate goods is included as a part of the value of the final good. It also does not include the value of services provided by homemakers.

Financial transactions such as purchase and sale of stocks and shares are not included. This is because it does not involve the production of any good or service. Sale of second-hand goods is also not included because of the problem of double counting.

7 0
3 years ago
Elroy Rocket is entering his senior year as an accounting major and has a number of options for his summer break. His options fo
Solnce55 [7]

Answer:

$8,300

Explanation:

Calculation for what Elroy's incremental profit or loss would be if he chooses option 2 over option 1

Using this formula

Incremental Profit of option 2 over option 1= Profit from option 1 - Profit from option 2

Let plug in the formula

Incremental Profit of option 2 over option 1= ($3,600*3)-(3*$1,100 - $800)

Incremental Profit of option 2 over option 1= $10,800 - $2,500

Incremental Profit of option 2 over option 1= $8,300

Therefore Elroy's incremental profit or loss would be if he chooses option 2 over option 1 would be $8,300

4 0
3 years ago
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