Company a had a total deletable capitalized cost of 656000

Assignment Help Accounting Basics

Reference no: EM13576506

Company A had a total deletable capitalized cost of $656,000 for a mine acquired in early 2010. It was estimated that the mine contained 820.000 tons of recoverable ore when production began. During 2010, 20,500 tons were mine, and 41,000 tons were mined in 2011.

1. Compute a depletion expense in 2010 and 2011 for financial accounting purposes. What accounts will be debited and credited to record depletion?

2. a. In 2010, 20,500 tons of ore were sold for $2,050,000. For tax purposes, operating expenses of the mine were $500,000. The taxpayer may deduct either cost depletion or percentage depletion,which for the type ore produced 8% of production sold from mine? Assume that percentage depletion is limited to the amount of net income from the property. What would be amount of depletion
allowable in 2010?
b. What would be the amount of cost despletion allowable for tax purposes in 2010, assuming that capitalized mineral costs are the same for tax purposes as for financial accounting?
c. What will be the amount of depletion based on cost that the company could deduct on its tax return in 2011 if it deducts percentage depletion in 2010?
d. Suppose in the first 3 years of mine's life. The company took percentage depletion totaling $654.000. Th the 5th year of the mine's life, production proceeds were $4,300,000.How much percentage depletion of cost of mineral?

Reference no: EM13576506

Questions Cloud

Hunter sobitson a waiter at the 20th hole restaurant worked : hunter sobitson a waiter at the 20th hole restaurant worked 43 12 hours this week and collected over 650 in tips. the

You are required to prepare a statement of cost to work out : ms modern comany ltd furnishes the following summary of trading and profit and loss account for the current year ending

Assume instead that cross uses the aging of accounts : the a.t. cross company is well known for its cross pens. the company recently reported the following amounts in its

Assuming no other transactions occurred between december 31 : at the end of 2012 extreme fitness has adjusted balances of 830000 in accounts receivable. on january 2 2013 the

Company a had a total deletable capitalized cost of 656000 : company a had a total deletable capitalized cost of 656000 for a mine acquired in early 2010. it was estimated that the

Prepare a statement of partnership liquidation indicating : prepare a statement of partnership liquidation indicating a the sale of assets and division of loss b the payment of

If the company decides to call the convertible bonds and : rob stevens is the chief executive officer of isner construction inc. and owns 750000 shares of stock. the company

The probability of rolling a 6 on a fair dice is 1667 a : the probability of rolling a 6 on a fair dice is 16.67. a dishonest gambler has a loaded dice which is not a fair- the

Why must objectives be at the topmost level of a conceptual : why must objectives be at the topmost level of a conceptual framework of

User Account

All Pages