Business, 24.09.2021 18:00 lalop3412

2. Arizona Mining Company acquired property with copper ore reserves estimated at 2 million pounds for Br. 1, 800, 000. The property will have an estimated value of Br. 1. 000,000 after the ore has been extracted. Before any ore could be removed, it was necessary to incur Br. 500, 000 of developmental costs. In the first year, 200, 000 pounds were removed and 160, 000 pounds of ore were sold; in the second, 400.000 pounds were removed and 410,0( pounds were sold. In the course of the second year's production, discoveries were made that indicated that if an added Br. 1. 460, 000 is spent on developmental costs during the third year, futtock removable ore will total 2.5 million pounds. After there added costs were incurred, production for the third year amounted to 510, 000 pounds with sales of 450, 000 pounds. Required:

a) Calculate the total depletion amount and the depletion expense that Arizona should report on its income statement for each of the three years. Should supporting computations and round units costs to the nearest three decimal places (assume FIFO)

b) Give the journal entry to record depletion and depletion expense at the end of each of the three years.

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2. Arizona Mining Company acquired property with copper ore reserves estimated at 2 million pounds f...

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