1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Solnce55 [7]
3 years ago
15

Coal Train Mines paid $435000 for the right to extract ore from a 225000​-ton mineral deposit. In addition to the purchase​ pric

e, Coal Train Mines also paid a $115 filing fee to the country​ recorder, a $2000 license fee to the state of​ Colorado, and $69135 for a geologic survey. Because the company purchased the rights to the minerals​ only, it expects this mineral rights asset to have a residual value of zero when it is fully depleted. During the first year of​ production, Coal Train Mines removed 48000 tons of​ ore, of which it sold 45000 tons.
Requirement:
Make journal entries to record (a) purchase of the mineral rights, (b) payment of fees and other costs, (c) depletion for first-year production, and (d) sales of ore.
A) Record the purchase of the mineral rights.
Journal
Date Accounts Debit Credit
B) Record the payment of fees and other costs.
Journal
Date Accounts Debit Credit
C) Record the depletion for first-year production.
Journal
Date Accounts Debit Credit
D) Record the sales of ore.
Journal
Date Accounts Debit Credit
Business
1 answer:
Nutka1998 [239]3 years ago
3 0

Answer:

Coal Train Mines

Journal Entries:

A) Record the purchase of the mineral rights.

Date            Accounts               Debit          Credit

         Mineral Rights             $435,000

         Cash Account                                   $435,000

To record the purchase of the mineral rights.

B) Record the payment of fees and other costs.

Journal

Date Accounts                        Debit             Credit

        Fees and other costs    $71,250

        Cash Account                                      $71,250

To record $115 filing fee, $2,000 license fee, and $69,135 for geological survey.

C) Record the depletion for first-year production.

Journal

Date       Accounts                   Debit         Credit

Dec 31    Depletion Expense  $101,250

               Accumulated Depletion             $101,250

To record the depletion charge for the year.

D) Record the sales of ore.

Journal

Date    Accounts             Debit        Credit

           Cash                    $

           Sales Revenue                     $

To record the sale of 45,000 tons of ore

Explanation:

a) Depletion is an accrual accounting technique.  It allocates the cost of extracting natural resources such as timber, minerals, and oil from the earth by using the percentage of extracted resources over the total resources.  Depletion is a non-cash expense, like depreciation and amortization, that lowers the cost value of an asset incrementally through scheduled charges to the income statement.  While depletion is for natural resources, depreciation is for property, plant, and equipment, while amortization is used for intangible assets.

b) The total cost to be capitalized = $506,250 ($435,000 + $71,250)

c) Depletion charge for the first year = $101,250 (45,000/225,000 * $506,250).  Depletion per unit is $2.25

d) The selling price was not indicated, so no sales value was calculated.

e) Ending Inventory = $6,750 (48,000 - 45,000 * $2.25)

You might be interested in
Suppose that a firm produces 200,000 units a year and sells them all for $10 each. The explicit costs of production are $1,500,0
satela [25.4K]

Answer:

Accounting profit will be $500000

Economic profit will be $200000

Explanation:

We have given number of units produces = 200000

Cost of one unit = $10

So total cost of production = 100000×$10 = $1000000

Explicit cost = $1500000

And implicit cost = $300000

We know that accounting profit = revenue - explicit cost = $1000000-$1500000 = $500000

And economic profit = revenue - implicit cost = $1000000-$300000 = $200000  

7 0
3 years ago
Which of the following refers to the way that interest added to an account earns
prisoha [69]

Answer:

APY is when interest is added to an account that is earning the money so I belive that is the answer

6 0
2 years ago
Which activity is an example of a time-based goal? A. Catherine plans to learn to play the guitar in the next few years. B. Davi
frez [133]

Answer: C. Farah wants to obtain her college degree in four years

A time bound goal has a specific, measurable time-frame within which a specific goal has to be achieved; it can also set as a specific target to be achieved at periodical intervals.

Amongst the options given, only option C has a specific, measurable and well-defined time frame within which a specific goal is set to realized.


6 0
3 years ago
Read 2 more answers
In 2013, there are four open flute positions in major orchestras. A total of 525 professional flutists audition. In the same yea
love history [14]
The best and most correct answer among the choices provided by your question is the second choice.

The differences of their salaries is that t<span>he bassoonists earn a higher salary than the flutists.</span>

I hope my answer has come to your help. Thank you for posting your question here in Brainly. We hope to answer more of your questions and inquiries soon. Have a nice day ahead!
3 0
3 years ago
Read 2 more answers
Which statement is true about the retail inventory method? Group of answer choices It may not be used to estimate inventories fo
mr_godi [17]

Answer:

The answer is: There are different versions of the retail inventory method.

Explanation:

There are several types of retail inventory method:

  1. the conventional (lower of average cost or market) method,
  2. the cost method
  3. the LIFO retail method
  4. the dollar value LIFO retail method

The retail inventory method is very useful for large retailers (e.g. grocery stores, hypermarkets, etc.). Its greatest advantage is that the inventory balance can be calculated without a physical count.

5 0
2 years ago
Other questions:
  • The store purchases used goods for resale from people that bring items to the store. since that can occur anytime that the store
    10·1 answer
  • Identify and explain two ways in which Manuel could communicate with individual workers about their pay and working conditions.​
    9·1 answer
  • Zytel Corporation produces cleaning compounds and solutions for industrial and household use. While most of its products are pro
    12·1 answer
  • You own a stock portfolio invested 25 percent in Stock Q, 25 percent in Stock R, 15 percent in Stock S, and 35 percent in Stock
    12·1 answer
  • If a monopolistically competitive firm raises its price, it a. loses all of its customers (sales drop to zero) as your answer lo
    11·1 answer
  • Alpha Division had the following information: Average operating asset base in Alpha Division $500,000 Operating income in Alpha
    7·1 answer
  • Who would be more likely to join the cross-country team (individual sport) instead of the volleyball team (team sport) and want
    10·2 answers
  • An entity may decide not to sell a long-lived asset (disposal group) classified as held for sale. It should therefore re-classif
    5·1 answer
  • What do pre-teen ducks hate? <br> will mark brainiest for right answer!<br> think hard.
    8·1 answer
  • Iowa enacts a law that restricts certain kinds of advertising to protect consumers from being misled. This law would likely be h
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!