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
Marina CMI [18]
3 years ago
10

Perez Company acquires an ore mine at a cost of $1,400,000. It incurs additional costs of $400,000 to access the mine, which is

estimated to hold 1,000,000 tons of ore. 180,000 tons of ore are mined and sold the first year. The estimated value of the land after the ore is removed is $200,000. Calculate the depletion expense from the information given. (Do not round your intermediate calculations.)
Cost
Salvage
Amount subject to depletion
Total units of capacity
Depletion per unit (#.##)
Units extracted and sold in period
Depletion expense
1. Prepare the entry to record the cost of the ore mine.
2. Prepare the year-end adjusting entry.
Business
1 answer:
mr Goodwill [35]3 years ago
3 0

Answer:

1. Journal Entry - See explanation section

2. Adjusting Entry - See explanation section

Explanation:

Before we provide journal entries, we have to calculate the depletion expense according to the questions format.

Cost (Purchase price + additional cost)  $1,800,000

Salvage value                                            $ 200,000

Amount subject to depletion                   $1,600,000

Total units of capacity                                1,000,000

Depletion per unit                                      $1.60

Units extracted and sold in period            180,000

Depletion expense                                    $288,000

Therefore, the journal entry to record the cost of the ore mine.

Debit Ore mine                 $1,800,000

Credit Cash                       $ 1,800,000

Since, the cost of acquisition of a mine ore will be the combination of the cost of an ore mind, both have been added to determine the total cost.

Adjusted entry will be-

Depreciation expense     Debit  288,000

Accumulated depreciation     Debit   288,000

You might be interested in
Which kind of decisions involving resources must producers of goods and services make? ECONOMICS.
yawa3891 [41]
A.Allocating is the answer
5 0
3 years ago
Read 2 more answers
Как защитить себя от воздействующих факторов взрыва, если вы находитесь в зоне действия продуктов взрыва?
Elenna [48]
What language is this in ⊅ω↑⊂∡⊂⊃∩∅⊃ÉçœÄÈΠЫднеО
5 0
2 years ago
________ communication is a form of two-way communication, a dialogue.
Goryan [66]
Interactive is the answer
3 0
3 years ago
I lost my bestfriend. Omg I can't take it.​
DIA [1.3K]

Answer:

why tho

Explanation:

why th

6 0
2 years ago
Read 2 more answers
Shelli's Ski Super has sales of $670, net fixed assets of $210, total assets of $305, and current assets of $25. What is the tot
Troyanec [42]

Answer:

2.20

Explanation:

The formula to compute the total assets turnover ratio is shown below:

Total asset turnover = (Sales revenue ÷ Total assets)

                                   = ($670 ÷ $305)

                                  = 2.20

We simply divide the sales revenue by the total assets, so that the total asset turnover ratio can be computed

All other information which is given is not relevant. Hence, ignored it

5 0
3 years ago
Other questions:
  • Franklin reviews financial data of a company to ensure accurate and complete information. Which job title does he most likely ha
    15·2 answers
  • g During the past year, a company had cash flow to creditors, an operating cash flow, and net capital spending of $30,591, $69,5
    15·1 answer
  • Differentiate between economic growth and economic development ?​
    12·1 answer
  • A department store decides to use "secret shoppers" at unannounced times to test for service quality among its personnel. Store
    15·1 answer
  • A major reason Enron used special purpose entities was: a. To increase equity dilution b. To increase working capital c. Off-bal
    13·1 answer
  • Job A offers you the following financial package: base salary of $35,000, 2 weeks paid vacation, full coverage health insurance
    12·1 answer
  • Wang Company accumulates the following adjustment data at December 31. For each item, indicate the (1) type of adjustment (prepa
    14·1 answer
  • Red October Company has 2,000 shares of 6%, $100 par cumulative preferred stock outstanding at December 31, 2016. No dividends h
    10·1 answer
  • Alejandro recently established a maintenance company as a sole proprietorship. He
    10·1 answer
  • What is the main difference between Time Management and Attention Management?
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!