Question. Tradewinds Construction Company had 4 dump trucks, 2 excavators, and other construction machinery worth $950,000 on January 1, 2020. During the year 2020, Seabreeze Construction spent $120,000 on two new trucks. The market value of all of the company's vehicles and construction machinery was $1,020,000 on December 31, 2020. 1) In 2020, what was Seabreeze's gross investment? 2) What was the depreciation amount in 2020? 3) In 2020, what was the net investment?
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- 1. The Fairy Company purchased a site for limestone quarry for P 100,000 on January 2, 2020. It estimates that the quarry will yield 400,000 tons of limestone. It estimates that its retirement obligation has a fair value of P 20,000 after which the land can be sold for P 10,000. In 2020, 80,000 tons were quarried and 60,000 tons sold. Cost of production (excluding depletion) are P4 per ton. Required: a. Compute the depletion cost per ton. b. Compute the total cost of inventory at December 31, 2020. c. Compute the total cost of goods sold for 2020. 2. Cooler Company acquired a tract of land containing an extractable natural resource. Cooler is required by the purchase contract to restore the land to a condition suitable for recreational use after it has extracted the natural resource. Geological surveys estimate that the recoverable reserves will be 5,000,000 tons and that the land will have of P1,000,000 after restoration. Relevant cost information as follows: Land P 9,000,000…The Fairy Company purchased a site for limestone quarry for P 100,000 on January 2,2020. It estimates that the quarry will yield 400,000 tons of limestone. It estimates that itsretirement obligation has a fair value of P 20,000 after which the land can be sold for P10,000. In 2020, 80,000 tons were quarried and 60,000 tons sold. Cost of production(excluding depletion) are P4 per ton. Required:a. Compute the depletion cost per ton.b. Compute the total cost of inventory at December 31, 2020.c. Compute the total cost of goods sold for 2020.1. The Fairy Company purchased a site for limestone quarry for P 100,000 on January 2, 2020. It estimates that the quarry will yield 400,000 tons of limestone. It estimates that its retirement obligation has a fair value of P 20,000 after which the land can be sold for P 10,000. In 2020, 80,000 tons were quarried and 60,000 tons sold. Cost of production (excluding depletion) are P4 per ton. Compute the total cost of goods sold for 2020.
- Sum-of-the-year's-digits. Jon Seceda Furnace Corp. purchased machinery for $315,000 on May 1, 2020. It is estimated that it will have a useful life of 10 years, salvage value of $15,000, production of 240,000 units, and working hours of 25,000. During 2021, Seceda Corp. uses the machinery for 2,650 hours, and the machinery produces 25,500 units My understanding of the equation is (Cost-Salvage Value) x Depreciation Fraction = Depreciation Charge. My calculation: ($315,000-$15,000) x 10/55 = 54,545.45 Bartely's answer (which is correct): ($315,000-$15,000) x 10/55 x 4/12 = 18,181.81 ($315,000-$15,000) x 9/55 x 8/12 = 32,727.27 Sum-of-the-Years'-digits = 50,909.08 (add 18,181.81 and 32,727.27) My question is where does the fractions (4/12 and 8/12) come from?Sheffield Corp. erected and placed into service an offshore oil platform on January 1, 2020, at a cost of $9 million. Sheffield is legally required to dismantle and remove the platform at the end of its 8-year useful life. Sheffield estimates that it will cost $1 million to dismantle and remove the platform at the end of its useful life and that the discount rate to use should be 9%. Use (a) factor Table A.2, (b) a financial calculator, or (c) Excel function PV. Ignore production related costs for this question. a. Prepare any necessary adjusting entries that are associated with the asset retirement obligation and related expenses at December 31, 2020, assuming that Sheffield follows IFRS. Ignore production-related costs. (To record depreciation expense) (To record interest expense) b, Prepare any necessary adjusting entries that are associated with the asset retirement obligation and related expenses at December 31, 2020, assuming that Sheffield follows ASPE. Ignore…On January 1,2019, Flora Inc. purchased natural resources for P36,000,000. The company expects the resources to produce 1,200,000 units of products. How much is the depletion expense for 2020 if the company mined and sold 260,000 units? O P8,400,000 OP8,000,000 O P7,800,000 O P8,200,000
- Brookins Enterprises, a trucking company, purchased the following during 2019: New long-haul trucks costing $2,080,000, purchased September 23, 2020. How much is the maximum cost recovery deduction for 2019? Assuming they claimed the maximum in 2020, how much is deductible in 2023? Assuming the trucks were sold for $975,000 on September 23, 2023, how much is the 2023 cost recovery deduction? Answer the above questions if Brookins elects out of bonus depreciation and does not elect under §179. President’s used vehicle (2018 Subaru Ascent, an SUV weighing 6,001 pounds) costing $26,500. How much is the maximum cost recovery deduction for 2020, assuming the owners have adequate net income? Assuming they claimed the maximum in 2020, how much is deductible in 2022? Nonresidential real estate purchased for $875,000 ($165,000 assigned to land); placed in service May 18, 2020. How much is deductible in 2020? How much for 2029? How much for 2030 if the real estate is sold on January…On January 3, 2020, Xenex Innovations purchased computer equipment for $145,000. The equipment will be used in research and development activities for five years or a total of 10,000 hours and then sold for about $24,000.Assume actual usage in hours of: 2020 2021 2022 2023 2024 1,850 1,880 3,400 3,080 3,700 1. Calculate depreciation expense and book values for each year of the equipment’s life for each method of depreciation using the table provided below. Xenex’s year-end is December 31. (Please don't round intermediate calculations, image attached for reference) 2. Analysis Component Which method will result in the greatest (Image 2 attached for reference) a. Total assets being reported on the balance sheet in 2020? in 2023? b. Operating expenses being reported on the income statement in 2020? in 2023?Brookins Enterprises, a trucking company, purchased the following during 2019: New long-haul trucks costing $2,080,000, purchased September 23, 2020. How much is the maximum cost recovery deduction for 2019? Assuming they claimed the maximum in 2020, how much is deductible in 2023? Assuming the trucks were sold for $975,000 on September 23, 2023, how much is the 2023 cost recovery deduction? Answer the above questions if Brookins elects out of bonus depreciation and does not elect under §179. President’s used vehicle (2018 Subaru Ascent, an SUV weighing 6,001 pounds) costing $26,500. How much is the maximum cost recovery deduction for 2020, assuming the owners have adequate net income? Assuming they claimed the maximum in 2020, how much is deductible in 2022? Nonresidential real estate purchased for $875,000 ($165,000 assigned to land); placed in service May 18, 2020. How much is deductible in 2020? How much for 2029? How much for 2030 if the real estate is sold on January…
- 15. In 2020, Tableta Company paid P4,000,000 to purchase a land containing a total estimated 160,000 tons of extractable mineral deposits. The estimated value of the property after the mineral has been removed is P800,000. On March 30, 2021, Tableta Company purchased mining equipment costing P1,500,000. The useful life of the equipment is 10 years. Extraction activities began in 2021 and by the end of the year, 20,000 tons had been recovered and sold. The depreciation expense pertaining to the mining equipment in 2021 amounted to?Flint Corp. erected and placed into service an offshore oil platform on January 1, 2023, at a cost of $10 million. Flint is legally required to dismantle and remove the platform at the end of its eight-year useful life. Flint estimates that it will cost $1.0 million to dismantle and remove the platform at the end of its useful life and that the discount rate to use should be 10% . Using (a) factor Table A.2, (b) a financial calculator, or (c) Excel function PV, prepare the entry to record the asset retirement obligation. Assume that none of the $1.0 million cost relates to production. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry. If no entry is required, select "No Entry for the account titles and enter 0 for the amounts.) Click here to view the factor table. Click here to view the factor…On June 5, 2023, Mabel Company purchased an oil well for $970,000. The well contains an estimated 87,000 barrels of oil, with an estimated residual value of zero. During July 2023, 21,000 barrels of oil were removed from the well and 17,000 barrels were sold later. What is the cost of oil sold for July? (Round intermediary calculations to the nearest cent and the final answer to the nearest dollar). A. $234,150. B. $87,000. C. $189,550. D. $970,000.