Description
Using the Excel file provided below as a starting point, or by creating your own Excel file, complete the following problem, and submit your assignment as an attachment here. Be sure to save your work before you submit, and present your work in a reasonable format with major answers highlighted. Because you have plenty of time to do this assignment, and given that the textbook is available for your use, this assignment should really be close to perfect.
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Here is the problem:
On January 2, 2020, Pork Mining Company acquired land with ore deposits at a cash cost of $6,000,000. Exploration and development costs amounted to $500,000. The residual value of the land is expected to be $1,200,000. The ore deposits contain an estimated 11 million tons. Present technology will allow the economical extraction of only 90% of the total deposit. Machinery, equipment, and temporary sheds were installed at a cost of $1,000,000. The assets will have no further value to the company when the ore body is exhausted, and they have a physical life of 12 years. The company expects the mine to be exhausted in 10 years, with sharp variations in annual production. In the year 2020, there were 400,000 tons of ore extracted.
Required:
A. Prepare a schedule to compute the depletion charge for 2020.
B. Compute the depreciation charge for 2020 under the units-of-production method.
C. If all other mining costs in 2020, except the depletion and depreciation calculated above, amounted to $3,920,000, what was the average cost per ton mined in 2020?
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Explanation & Answer
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Chapter 11 Homework #1
Name:
Please add, delete, or move columns, rows, or numbers as necessary.
Please make sure all numbers are formatted...