Reference no: EM13866209
On January 2, 2010, the Whistler Company purchased land for $450,000, from which it is estimated that 400,000 tons of ore could be extracted. It estimates that it will cost $80,000 to restore the land, after which it could be sold for $30,000.During 2010, the company mined 80,000 tons and sold 50,000 tons. During 2011, the company mined 100,000 tons and sold 120,000 tons. At the beginning of 2012, the company spent an additional $100,000, which increased the reserves by 60,000 tons. In 2012, the company mined 140,000 tons and sold 130,000 tons. The company uses a FIFO cost flow assumption.
Required
1. Calculate the depletion included in the income statement and ending inventory for 2010, 2011, and 2012.2. Prepare the natural resources section of the balance sheet on December 31, 2010, 2011, and 2012, assuming that an accumulated depletion account is used.
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The company uses a fifo cost flow assumption
: On January 2, 2010, the Whistler Company purchased land for $450,000, from which it is estimated that 400,000 tons of ore could be extracted.
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