Question
Alora Company sought to increase the reserve of special mineral resources. During 2017, the company purchased a piece of property that was expected to retain
Alora Company sought to increase the reserve of special mineral resources. During 2017, the company purchased a piece of property that was expected to retain some value after the removal of the mineral resources was complete. Company records reveal the following:
In the year 2017
Purchase price of property $ 8,900,000
Estimated supply of mineral resources 7,000,000 tons
Estimated property value after removal of
mineral resources $ 1,300,000
Total removal this year 0 tons
In the year 2018
Capitalized development cost $ 1,500,000
Total resources removal this year 0 tons
In the year 2019
Total resources removal this year 1,100,000 tons
In the year 2020
Estimated total resources to be recovered
in future years(based on new
discoveries) 7,320,000tons
Additional capitalized development costs $1,922,000
Total resources removal this year 1,400,000
REQUIRED:
What are the amounts of depletion expense for 2019 and 2020
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Glencoe Accounting
Authors: McGraw-Hill
1st Edition
0021400881, 9780021400881
