Please, I need to know how to do the balance sheet and the income statement On J
ID: 2468245 • Letter: P
Question
Please, I need to know how to do the balance sheet and the income statement
On July 1, 2014, Steff Inc. invested $720,000 in a mine estimated to have 800,000 tons of ore of uniform grade. During the last 6 months of 2014, 120,000 tons of ore were mined and sold.
Please, I need to know how to do the balance sheet and the income statement
On July 1, 2014, Steff Inc. invested $720,000 in a mine estimated to have 800,000 tons of ore of uniform grade. During the last 6 months of 2014, 120,000 tons of ore were mined and sold.
Instructions Depletion costs per unit = 0.11111 a. Prepare the journal entry to record depletion expense. 2014 Account Title Debit Credit Depletion Expense 108,000 Accumulated Depletion 108,000 b. Assume that the 120,000 tons of ore were mined, but only 90,000 units were sold. How are the costs applicable to the 30,000 unsold units reported? Cost applicable to the 30,000 unsold units shall be shown under Acumulated Depreciation The balance sheet would show ore on hand a current asset at 30,000 tons times the cost per ton 27,000 2014 Balance sheet Income statementExplanation / Answer
a. Dec. 31 Depletion Expense. 108,000
Accumulated Depletion 108,000
[120,000 X $0.90 = 108,000]
b. The costs pertaining to the unsold units are reported in current assets as part of inventory
(30,000 X $0.90 = $27,000)
Cost (1) $720,000 Unit Estimated (2) 800,000 tons Depletion Cost Per Unit [(1) / (2)] $0.90