Calculate the amortization cost per tonne of the mine

Assignment Help Accounting Basics
Reference no: EM132879710

Question 1 - Tolbert Company purchased equipment on January 1, 2008 for $60,000. It is estimated that the equipment will have a $5,000 residual value at the end of its 5-year useful life. It is also estimated that the equipment will produce 100,000 units over its 5-year life.

Instructions - Answer the following independent questions.

1. Calculate the amount of amortization expense for the year ended December 31, 2008, using the straight-line method of amortization.

2. If 16,000 units of product are produced in 2008 and 24,000 units are produced in 2009, what is the book value of the equipment at December 31, 2009 using the units-of-activity amortization method.

3. If the company uses the double declining-balance method of amortization, what will be the balance of the Accumulated Amortization-Equipment account at December 31, 2010?

Question 2 - McGuinness Mining Company purchased land containing an estimated 15 million tonnes of ore at a cost of $5,400,000. The land without the ore is estimated to be worth $600,000. The company expects to operate the mine for 10 years. Buildings costing $800,000 are erected on the site and are expected to last for 25 years. Equipment costing $1,000,000 with an estimated life of 12 years is installed. The buildings and the equipment possess no residual value after the mine is closed. During the first year of operations, the mining company mined and sold 2 million tonnes of ore.

Instructions -

(a) Calculate the amortization cost per tonne of the mine.

(b) Calculate the amortization expense for the first year on the mine.

(c) Calculate the appropriate first year's amortization expense for the buildings.

(d) Calculate the appropriate first year's amortization expense for the equipment.

Reference no: EM132879710

Questions Cloud

Prepare the journal entry to record Paddy sale : Prepare the journal entry to record Paddy's sale of the Ford Motor Company shares on 2/3/2012. Assume this investment is treated as trading securities
Telecommunication in the philippines : Why is there a lot of opposition on issues allowing China to hold telecommunication in the Philippines?
What is the size of the replacement payment : Jane was due to make loan payments of $1659 nine months ago, 53455 three month ago, what is the size of the replacement payment
Discuss the importance of prevention regarding juvenile : Discuss the importance of prevention and intervention regarding juvenile delinquency. What do you think are the most effective components in treatment?
Calculate the amortization cost per tonne of the mine : The land without the ore is estimated to be worth $600,000. Calculate the amortization cost per tonne of the mine
Discuss thoughts on the effectiveness of the nipp : Choose the one step that is the most important or has the greatest impact on the other steps of the Risk Management Framework and describe why.
Calculate the statutory deductions : Calculate the statutory deductions that Home Depot would withhold from Jesse at source, based on a weekly pay cycle
Explain what are the alternatives to jail or prison : Explain What are the alternatives to jail or prison? Please detail some of the ways that the United states can lower the amount of individuals incarcerated?
What is the total overhead variance : Stack Co. uses a standard cost system for its production process. Using the one-variance approach, what is the total overhead variance

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd