Reference no: EM132668983
On January 2, 2016, Spring Company purchased land for $470,000, from which it is estimated that 360,000 tons of ore could be extracted. It estimates that the present value of the cost necessary to restore the land is $67,000, after which it could be sold for $22,000.
During 2016, Spring mined 79,000 tons and sold 59,000 tons. During 2017, Spring mined 99,000 tons and sold 109,000 tons. At the beginning of 2018, Spring spent an additional $110,000, which increased the reserves by 62,000 tons. In 2018, Spring mined 129,000 tons and sold 109,000 tons. Spring uses a FIFO cost flow assumption.
Required:
Problem 1. Calculate the depletion included in the income statement and ending inventory for 2016, 2017, and 2018. Round the depletion rate to the nearest cent. If required, round the final answers to the nearest dollar.
2016
Depletion deducted from income 84,370
Depletion included in inventory 28,600
2017 Depletion deducted from income 155,870
Depletion included in inventory 14,300
2018 Depletion deducted from income ????
Depletion included in inventory ????
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