Question
On August 1, 2020, a copper mining company acquired and installed a new rock crusher for $25,000,000. The crusher is used in the mine to
On August 1, 2020, a copper mining company acquired and installed a new rock crusher for $25,000,000. The crusher is used in the mine to aid in the excavation of ore. At the time of installation, management estimates that the crusher will be used for 8 years, help to mine 3 million tons of ore, and have a residual value of $1,000,000. The company has a December 31 fiscal year end.
The mines actual production through 2022 was as follows:
Year Tons of ore mined
2020 150,000
2021 400,000
2022 350,000
- [DEPRECIATION METHODS]
- What is accumulated depreciation for the rock crusher as of December 31, 2021 assuming the
company uses straight-line depreciation? Show your work.
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- What is depreciation expense for the rock crusher in 2020 assuming the company uses the units-of-production method? Show your work.
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- What is the book value of the rock crusher as of December 31, 2021 assuming the company uses the double-declining-balance depreciation method? Show your work (use the grid provided if you like).
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Cash And Financial Management Study Text
Authors: Kaplan
1st Edition
9781839960529
