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Licemer1 [7]
2 years ago
5

Fortune Drilling Company acquires a mineral deposit at a cost of $5,900,000. It incurs additional costs of $600,000 to access th

e deposit, which is estimated to contain 2,000,000 tons and is expected to take 5 years to extract. What journal entry would be needed to record the expense for the first year assuming 418,000 tons were mined
Business
1 answer:
IgorC [24]2 years ago
8 0

Answer and Explanation:

the journal entry is given below:

Depletion Expense $1,358,500

         To Accumulated Depletion $1,358,500.

(Being depletion expense is recorded)

Here the depletion expense is debited as it increased the expense and credited the accumulated depreciation as it decreased the assets

Working note

Depletion expense is

= ($5,900,000 + $600,000) ÷ $2,000,000 × 418,000

= $1,358,500

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Not to sure abt my ans.. i need some confirmation lol
koban [17]

Answer:

your answer is correct

Explanation:

4 0
3 years ago
Condensed balance sheet and income statement data for Jergan Corporation are presented here.
IgorLugansk [536]

Answer:

Jergen Corporation

                                             2019                2020

(1) Profit margin Ratios:           13%                10%

(2) Gross profit rate               39.2%             35.7%

(3) Asset turnover                   1.06                 1.02

(4) Earnings per share         $2.63              $1.80

(5) Price-earnings ratio =       3.2x                4.2x

(6) Payout ratio =                 62%                76%

(7) Debt to assets ratio =   32%                28%

Explanation:

a) Data and Calculations:

Jergan Corporation

Balance Sheets

December 31

                                                 2020        2019        2018

Cash                                     $ 29,300    $ 17,300    $ 17,000

Accounts receivable (net)      49,900       44,100       47,800

Other current assets             90,900      96,000      63,900

Investments                           55,200      70,200      45,600

Plant and equipment (net)  500,700    370,600    358,000

                                          $726,000 $598,200 $532,300

Current liabilities                 $84,800    $79,100    $70,300

Long-term debt                    145,700     85,900      50,800

Total debt                         $230,500  $165,000    $121,100

Common stock, $10 par     348,000   320,000     312,000

Retained earnings               147,500     113,200      99,200

                                         $726,000 $598,200 $532,300

Jergan Corporation

Income Statement

For the Years Ended December 31

                                                            2020           2019

Sales revenue                                $743,000    $606,900

Less: Sales returns and allowances 40,000        29,500

Net sales                                          703,000       577,400

Cost of goods sold                          427,400       371,500

Gross profit                                     275,600      205,900

Operating expenses

(including income taxes)                 184,210        148,160

Net income                                    $ 91,390      $ 57,740

                                                     2020       2019     2018

Market price of common stock  $8.50      $7.50   $7.00

                                               2020        2019        2018

Retained earnings               147,500       113,200     99,200

Net income                         $ 91,390    $ 57,740

Dividend paid                     $57,090     $43,740

Outstanding shares             34,800       32,000

Dividend per share              $1.64         $1.37

Average Assets:             $662,100        $565,250

                    ($726,000 + $598,200)/2  ($598,200 + $532,300)/2

a) Ratios:

                                      2019                                  2020

(1) Profit margin Ratios: 13% ($91,390/$703,000)  10% ($57,740/$577,400)

(2) Gross profit rate     39.2%                                35.7%

                ($275,600/$703,000)                          ($205,900/$577,400)

(3) Asset turnover          1.06                                 1.02

                 $703,000/$662,100                          $577,400/$565,250

(4) Earnings per share $2.63 ($ 91,390/34,800)   $1.80 ($57,740/32,000)

(5) Price-earnings ratio = 3.2 ($8.50/$2.63)     4.2 ($7.50/$1.80)

(6) Payout ratio =            62% ($1.64/$2.63)     76% ($1.37/$1.80)

(7) Debt to assets ratio =      32%                             28%

                                       ($230,500/$726,000)    ($165,000/$598,200)

     

7 0
3 years ago
Selene, a new recruit at Yellow Systems Inc., was encouraged to join the Hispanic Help Group (HHP) to discuss the challenges and
il63 [147K]

Answer:employee support group.

Explanation:employee support group are voluntary, employee-led associations where team members join together in light of common interests, backgrounds, or demographics.

A group of employees that join together in the workplace based on shared interests, backgrounds, or life experiences. Employee resource groups help provide support for both career and personal development.

5 0
3 years ago
Suppose the government decides that every family should own its own home. To bring this about, the government decides to subsidi
stira [4]

Answer:

d. the supply curve of new houses would shift rightward, since builders would be willing to produce and sell more houses at each given price.

Place more oil on the market this year, shifting the curve rightward.

Explanation:

1. In the given scenario the government is willing to give home-construction companies $10,000 for every house that they build.

This will result in more willingness on the part of the construction companies to build more houses.

More houses built means more income coming in from the government.

Therefore the supply curve of home building will shift to the right.

2. When oil producers expect prices of oil to increase in the next year, there is a need to control oil prices by increasing availability of oil in the market.

Increase in price results from a scarcity of oil. So to mitigate this excess oil is supplied to control price increase.

This action will shift the curve rightward.

6 0
2 years ago
The merger of two firms producing personal computers is an example of a __________ merger. Group of answer choices
jasenka [17]

Answer:

Horizontal merger

Explanation:

The merger of two firms producing personal computers is an example of a horizontal merger

A horizontal merger is a merger or business collaboration that happens between firms that operate in the same industry. The products being sold are similar and in the same market

4 0
3 years ago
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