Acc557 Financial Accounting: E9-11 On July 1, 2014, Sutton Inc

Acc557 Financial Accounting

EXERCISE 9-11
On July 1, 2014, Sutton 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.
a) Calculate depletion cost per unit. (Round answer to 2 decimal places, e.g. $0.50.)
b) Prepare the journal entry to record depletion expense. (Round answers to 0 decimal places, e.g. $2,125. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
c) 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?
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