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mestny [16]
3 years ago
6

Alpha Mining Company recognizes $2 of depletion for each ton of ore mined. During 2016, 850,000 tons of ore were mined and 725,0

00 tons were sold. Using this information, how much should be recorded for FY 2016 for the following accounts:
1.accumulated Depletion
2.inventory
3.cost of Goods Sold
Business
1 answer:
jonny [76]3 years ago
3 0

Answer:

1. $1,700,000

2. $250,000

3. $1,450,000

Explanation:

Given that,

Depletion for each ton of ore mined = $2

Ore mined during 2016 = 850,000 tons

Ore sold during 2016 = 725,000 tons

1. Accumulated depletion:

= Ore mined during 2016 × Depletion for each ton of ore mined

= 850,000 tons × $2

= $1,700,000

2. Inventory:

= (Ore mined during 2016 - Ore sold during 2016) × Depletion for each ton of ore mined

= (850,000 tons - 725,000 tons) × $2

= 125,000 tons × $2

= $250,000

3. Cost of goods sold:

= Ore sold during 2016 × Depletion for each ton of ore mined

= 725,000 tons × $2

= $1,450,000

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Tju [1.3M]

Answer:

Option C. A debit to Equipment for $620, a credit to Cash for $140, and a credit to Accounts Payable for $480.

Explanation:

The reason is that the equipment has been acquired by the business which is worth $620 and this means that the equipment which is asset in nature must be increased by it fair value which is $620. The purchase of equipment requires the payment of $140 at the spot which means that the cash asset will be reduced by $140 and the remainder $480 will be paid in future which means that the current liabilities will be increased by $480.

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7 0
3 years ago
Analyzing Financial Statement Effects of Bond Redemption Dechow, Inc., issued $750,000 of 8%, 15-year bonds at 96 on July 1, 200
Crank

Answer:

Dechow, Inc.

Journal Entries:

July 1, 2009: DebitCash $720,000

Debit Bonds Discount $30,000

Credit 8% Bonds Payable $750,000

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