Question

At the beginning of 2017, Carla Vista Company, a small private company, acquired a mine for...

At the beginning of 2017, Carla Vista Company, a small private company, acquired a mine for $1,735,000. Of this amount, $170,000 was allocated to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists found that approximately 12 million units of ore appear to be in the mine. Carla Vista had $180,000 of development costs for this mine before any extraction of minerals. It also determined that the fair value of its obligation to prepare the land for an alternative use when all of the minerals have been removed was $55,000. During 2017, 3.0 million units of ore were extracted and 2.20 million of these units were sold.

1.

Prepare the required journal entry, if any, for the total amount of depletion for 2017.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
At the beginning of 2017, Blossom Company, a small private company, acquired a mine for $850,000....
At the beginning of 2017, Blossom Company, a small private company, acquired a mine for $850,000. Of this amount, $100,000 was allocated to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists found that approximately 12 million units of ore appear to be in the mine. Blossom had $170,000 of development costs for this mine before any extraction of minerals. It also determined that the fair value of its obligation to prepare...
At the beginning of 2017, Novak Company acquired a mine for $2,229,600. Of this amount, $117,000...
At the beginning of 2017, Novak Company acquired a mine for $2,229,600. Of this amount, $117,000 was ascribed to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists have indicated that approximately 11,230,000 units of ore appear to be in the mine. Novak incurred $198,900 of development costs associated with this mine prior to any extraction of minerals. It also determined that the fair value of its obligation to prepare the land...
At the beginning of 2020, Blossom Company, a small private company, acquired a mine for $2,160,000....
At the beginning of 2020, Blossom Company, a small private company, acquired a mine for $2,160,000. Of this amount, $160,000 was allocated to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists found that approximately 19 million units of ore appear to be in the mine. Blossom had $215,000 of development costs for this mine before any extraction of minerals. It also determined that the fair value of its obligation to prepare...
Exercise 11-15 At the beginning of 2020, Ivanhoe Company, a small private company, acquired a mine...
Exercise 11-15 At the beginning of 2020, Ivanhoe Company, a small private company, acquired a mine for $2,270,000. Of this amount, $150,000 was allocated to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists found that approximately 18 million units of ore appear to be in the mine. Ivanhoe had $180,000 of development costs for this mine before any extraction of minerals. It also determined that the fair value of its obligation...
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...
Kelly Company acquired an iron mine for $2,349,000. Kelly paid a $1,000 filing fee with the...
Kelly Company acquired an iron mine for $2,349,000. Kelly paid a $1,000 filing fee with the county recorder, $50,000 license fee to the state, and $100,000 for a geologic survey. It was estimated that the land would have a value of $400,000 after completion of the mining operations, and that 1,000,000 tons of iron ore could be extracted from the mine. During the first year of operations, 100,000 tons of iron ore were extracted and 80,000 tons of iron ore...
On May 1, 2018, Hecala Mining entered into an agreement with the state of New Mexico...
On May 1, 2018, Hecala Mining entered into an agreement with the state of New Mexico to obtain the rights to operate a mineral mine in New Mexico for $10.3 million. Additional costs and purchases included the following (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.): Development costs in preparing the mine $ 3,500,000 Mining equipment 167,700 Construction of various structures on...
14.During 2017, Bolton Corporation acquired a mineral mine for $1,400,000 of which $100,000 was determined to...
14.During 2017, Bolton Corporation acquired a mineral mine for $1,400,000 of which $100,000 was determined to be the salvage value of the land after the mineral has been removed. Geological surveys have indicated that 13 million units of the mineral could be extracted. During 2017, 1,500,000 units were extracted and 1,200,000 units were sold. What is the amount of depletion affecting the 2017 income statement? Select one: a. $140,000 b. $150,000 c. $138,000 d. $156,000 e. $120,000 15. Which item(s)...
Exercise 3: Depletion The Stewart Mining Company operates a copper mine. The company paid $10,000,000 in...
Exercise 3: Depletion The Stewart Mining Company operates a copper mine. The company paid $10,000,000 in 2018 for the mining site and spent an additional $1,000,000 to prepare the mine for extraction of the copper. After extracting the copper, the company is required to restore the land to its original condition. The present value of the restoration costs is $2,000,000. There will be no residual (salvage) value for the copper mine. The company also purchased new equipment in 2018 for...
Exercise 9-12 On January 1, 2017, Carla Vista Co. had a balance of $321,500 of goodwill...
Exercise 9-12 On January 1, 2017, Carla Vista Co. had a balance of $321,500 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life. During 2017, the company had the following additional transactions. Jan. 2 Purchased a patent (6-year life) $376,950. July 1 Acquired a 8-year franchise; expiration date July 1, 2025, $547,200. Sept. 1 Research and development costs $185,500. Prepare the necessary entries to...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT