Exercise 11-23 - Internet Explorer TOR MES: File Edit View Favorites Tools Help
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Exercise 11-23 - Internet Explorer TOR MES: File Edit View Favorites Tools Help veys conducte ation to prepar 0SP 18 ACCO 211-90/ Chapter 11 Exercise 11-23 At the beginning of 2017, Kingbird Company acquired a mine for $986,400. of this amount, $106,000 was ascribed to the land value and the remaining portion to the minerals in the mine. Surveys conducted by ge approximately 11,030,000 units of ore appe associated with this mi prepare the land for an 2017, 2,566,000 units of ore were extracted and 1,908,000 of these units were sold. ologists have indicated that ar to be in the mine. Kingbird incurred $180,200 of development costs ne prior to any extraction of minerals. It also determined that the fair value of its obligation to alternative use wh mineral has been final answer to The total amount of for 2017. (Round per unit answer to 2 decimal places, e.g.o.45 for computational Depletion for 2017s The amount that is charged as an expe answer to 2 decimal places, e.g. 0.45 for computational p 45,892.) nse for 2017 for the cost of the minerals sold during 2017.(Round per unit rpose and final answer to o decimal places, e.g. Amount that is charged as an expense for 2017 Question Attempts: 0 of 3 usedExplanation / Answer
Cost of the Mine 986,400 Add: Development costs 180,200 Add: Fair value of obligation to prepare the land 42,400 less: Land cost 106,000 Less: Salvage value - Depreciable basis 1,103,000 Approximate unitsof Ore available 11,030,000 Depletion per unit 0.10 Depletion for 2017 (Units extracted * Depletion expense per unit) 256,600 Units extracted in 2017 2566000 x Depletion expense per unit 0.10 Amount that is charged as an expense (number of units sold* Depletion per unit) 190,800 Number of units sold 1908000 x Depletion expense per unit 0.10
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