Question

Early in the current year, Tokay Co. purchased the Silverton Mine at a cost of $25,120,000....

Early in the current year, Tokay Co. purchased the Silverton Mine at a cost of $25,120,000. The mine was estimated to contain 240,000 tons of ore and to have a residual value of $4,000,000 after mining operations are completed. During the year, 225,000 tons of ore were removed from the mine. At year-end, the book value of the mine (cost minus accumulated depletion) is:

$21,120,000.

$5,320,000.

$19,800,000.

$17,120,000.

Homework Answers

Answer #1

Answer:

At year-end, the book value of the mine=$5,320,000

Working notes for the above answer is as under

Calculation for the book value of the mine at year-end

First we need to calculate the cost per ton

=Cost -salvage value/ estimated tons.

=25,120,000-4,000,000 /240,000

=$88 per ton

Tons reaming

=240,000-225000

=15,000 ton

book value of the mine at year-end

=(15000 ton x $88)+4,000,000

=132000+4,000,000

=5,320,000

book value of the mine at year-end=$5,320,000

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1.Early in the current year, Tokay Co. purchased the Silverton Mine at a cost of $36,980,000....
1.Early in the current year, Tokay Co. purchased the Silverton Mine at a cost of $36,980,000. The mine was estimated to contain 330,000 tons of ore and to have a residual value of $2,000,000 after mining operations are completed. During the year, 315,000 tons of ore were removed from the mine. At year-end, the book value of the mine (cost minus accumulated depletion) is: $3,590,000. $32,980,000. $33,390,000. $34,980,000. 2. Intangible assets are assets used in business operations but which: Cannot...
Salter Mining Company purchased the Northern Tier Mine for $77 million cash. The mine was estimated...
Salter Mining Company purchased the Northern Tier Mine for $77 million cash. The mine was estimated to contain 9.17 million tons of ore and to have a residual value of $6.7 million. During the first year of mining operations at the Northern Tier Mine, 80,000 tons of ore were mined, of which 14,000 tons were sold. a. Prepare a journal entry to record depletion during the year. b. Show how the Northern Tier Mine, and its accumulated depletion, would appear...
Perez Company acquires an ore mine at a cost of $2,660,000. It incurs additional costs of...
Perez Company acquires an ore mine at a cost of $2,660,000. It incurs additional costs of $744,800 to access the mine, which is estimated to hold 1,900,000 tons of ore. 225,000 tons of ore are mined and sold the first year. The estimated value of the land after the ore is removed is $380,000. Calculate the depletion expense from the information given. (Round "Depletion per unit" to 3 decimal places.) Cost Salvage Amount subject to depletion Total units of capacity...
Zvinakis Mining Company paid $130,000 for the rights to mine lead in southeast Missouri. The cost...
Zvinakis Mining Company paid $130,000 for the rights to mine lead in southeast Missouri. The cost to drill and erect a mine shaft was $2,330,000, and equipment to process the lead ore before shipment to the smelter was $1,653,000. The mine is expected to yield 2,000,000 tons of ore during the five years it is expected to be operating. The equipment has an estimated residual value of $143,000 when mining is concluded. The mine started operations on April 30, 2018....
Zvinakis Mining Company paid $300,000 for the rights to mine lead in southeast Missouri. The cost...
Zvinakis Mining Company paid $300,000 for the rights to mine lead in southeast Missouri. The cost to drill and erect a mine shaft was $2,500,000, and equipment to process the lead ore before shipment to the smelter was $2,010,000. The mine is expected to yield 2,000,000 tons of ore during the five years it is expected to be operating. The equipment has an estimated residual value of $160,000 when mining is concluded. The mine started operations on April 30, 2018....
On July 23 of the current year, Dakota Mining Co. pays $7,282,080 for land estimated to...
On July 23 of the current year, Dakota Mining Co. pays $7,282,080 for land estimated to contain 9,336,000 tons of recoverable ore. It installs machinery costing $1,773,840 that has a 10-year life and no salvage value and is capable of mining the ore deposit in eight years. The machinery is paid for on July 25, seven days before mining operations begin. The company removes and sells 481,250 tons of ore during its first five months of operations ending on December...
In March, 2017, Mayton Mining Co. purchased a coal mine for $12,000,000. Total possible coal to...
In March, 2017, Mayton Mining Co. purchased a coal mine for $12,000,000. Total possible coal to be mined is estimated at 2,000,000 tons. Mayton is required by law to restore the land to a reasonable condition after the conclusion of mining operations at an estimated cost of $750,000. Mayton estimates the land will then be worth $2,000,000. The company incurred $2,800,000 of development costs preparing the mine for production. During 2017, 400,000 tons were removed and 310,000 tons were sold....
On July 23 of the current year, Dakota Mining Co. pays $8,342,400 for land estimated to...
On July 23 of the current year, Dakota Mining Co. pays $8,342,400 for land estimated to contain 9,480,000 tons of recoverable ore. It installs machinery costing $948,000 that has a 10-year life and no salvage value and is capable of mining the ore deposit in eight years. The machinery is paid for on July 25, seven days before mining operations begin. The company removes and sells 487,000 tons of ore during its first five months of operations ending on December...
Please include the formula used to solve. 1)Navajo Mining Company purchased a mine in 2013 for​...
Please include the formula used to solve. 1)Navajo Mining Company purchased a mine in 2013 for​ $3,400,000. It was estimated that the mine contained​ 200,000 tons of ore and that the mine would be worthless after all of the ore was extracted. The company extracted​ 25,000 tons of are in 2013 and​ 30,000 tons of ore in 2014. What is the book value of the mine at the end of​ 2014? A. ​$2,975,000 B. ​$2,465,000 C. ​$2,720,000 D. ​$3,060,000 2)...
On April 2, 2017, Montana Mining Co. pays $3,321,170 for an ore deposit containing 1,539,000 tons....
On April 2, 2017, Montana Mining Co. pays $3,321,170 for an ore deposit containing 1,539,000 tons. The company installs machinery in the mine costing $176,700, with an estimated seven-year life and no salvage value. The machinery will be abandoned when the ore is completely mined. Montana begins mining on May 1, 2017, and mines and sells 143,100 tons of ore during the remaining eight months of 2017.    Prepare the December 31, 2017, entries to record both the ore deposit...