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CaHeK987 [17]
3 years ago
8

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?
Business
1 answer:
dybincka [34]3 years ago
7 0

Answer: <u>$4,500</u>

Explanation:

Equipment was purchased for $76,000.

It has an estimated useful life of 8 years.

It will be sold for $4,000 after these 8 years so that is the salvage value.

With these figures depreciation per annum is calculated with the following formula;

Depreciation per annum = \frac{Cost of Asset - Salvage Value}{Useful life}

= \frac{76,000 - 4,000}{8}

= $9,000

The Equipment was purchased on July 1, Year 1. In Year 1 therefore it will only be in use for half the year and this is what it should b depreciated in light of.

Semi-annual Depreciation = 9,000/2

= <u>$4,500</u>

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Answer:

(a) 2

(b) 2.25

(c) 12.5%

Explanation:

To solve this question we need to remember that

Total \, Productivity = \frac{Total\,Ouput}{Total \, Man \, Hours}

(a) 10 persons produce 160 valves in 8 hours, this implies a productivity of 2=160/(8x10)

(b) 2.25= 180/(8x10)

(c) Percentage change is given by (2.25-2)/2=.125

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3 years ago
Riley has worked for Centrum Springs, Inc., for many years and has now been given the opportunity to advance in the company. His
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Answer:

B. I hope i helped!

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7 0
2 years ago
For each transaction,
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Answer:

1) I used an excel spreadsheet

2) a. On May 15, DeShawn Tyler opens a landscaping company called Elegant Lawns by investing $7,000 in cash along with equipment having a $3,000 value.

Dr Cash 7,000

Dr Equipment 3,000

    Cr DeShawn Tyler, capital 10,000

b. On May 21, Elegant Lawns purchases office supplies on credit for $500.

Dr Office supplies 500

    Cr Accounts payable 500

c. On May 25, Elegant Lawns receives $4,000 cash for performing landscaping services.

Dr Cash 4,000

    Cr Landscaping Revenue 4,000

d. On May 30, Elegant Lawns receives $1,000 cash in advance of providing landscaping services to a customer.

Dr Cash 1,000

    Cr Unearned Landscaping Revenue 1,000

3)

Cash (101)

debit                    credit

7,000

4,000

<u>1,000                              </u>

12,000

Office Supplies (124)

debit                    credit

500

Equipment (167)

debit                    credit

3,000

Accounts Payable (201)

debit                    credit

                            500

Unearned Landscaping Revenue (236)

debit                    credit

                            1,000

D. Tyler, Capital (301)

debit                    credit

                            10,000

Landscaping Revenue (403)

debit                    credit

                            4,000

Download pdf
3 0
3 years ago
On January 1, 2019, East Lansing, Inc., issues $2,000,000 of 10 percent, 5-year bonds that pay interest of $100,000 semiannually
xenn [34]

Answer:

The issue price of the bond is the present value of  the future cash flows of the bond,which is $2,162,217.92.  

The calculation of the issue price is shown below.

Explanation

The bond will pay interest of $100000 for 10 periods plus $2000000 par at the end of the tenth period.

The formula applicable is: Future value of each period multiplied by applicable discounting factor.

Even though the bond is issued for only 5 years,but the fact that it pays interest semi-annually makes it 10 period duration(5years*2).

Interest rate should also be adjusted to show the time horizon of six month each by dividing 8% per year by 2.

The detailed computation of present value is as follows:

 Periods   Coupon Interest @10%/2   DCF=1/(1+r)^n   PV  

1.00                 100,000.00                     0.9615            96,153.85  

2.00                  100,000.00                       0.9246     92,455.62  

3.00                  100,000.00                        0.8890      88,899.64  

4.00                   100,000.00                          0.8548      85,480.42  

5.00                    100,000.00                            0.8219      82,192.71  

6.00                    100,000.00                            0.7903     79,031.45  

7.00                    100,000.00                             0.7599    75,991.78  

8.00                    100,000.00                             0.7307    73,069.02  

9.00                    100,000.00                             0.7026     70,258.67  

10.00                    2,100,000.00                     0.6756   <u>1,418,684.75</u>  

                                                                           <u> 2,162,217.92</u>  

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2 years ago
What is the name of the law that states that as we shift factors of production from making one good or service to another, the c
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3 years ago
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