Valix Finacc vol 1 Problem 18-1 and 2

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 18 Problem 18-1 and 2

1. Ore property                                                                                    5,000,000                                 

            Cash                                                                                                                5,000,000

      

2. Ore property                                                                                    3,000,000                                 

            Cash                                                                                                                3,000,000

3. Machinery                                                                                        4,000,000

            Cash                                                                                                               4,000,000

4. Depletion                                                                                         1,140,000

            Accumulated depreciation                                                                            1,140,000

            8,000,000 – 400,000    = 7,600,000

            7,600,000 / 2,000,000  = 3.80

            300,000 x 3.80             = 1,140,000

5. Depreciation                                                                                      600,000

            Accumulated depreciation                                                                               600,000

            4,000,000 / 2,000,000  =  2.00

            300,000 x 2.00             =  600,000