Question

In 2021, the Marion Company purchased land containing a mineral mine for $1,770,000. Additional costs of $590,000 were incurred to develop the mine. Geologists estimated that 250,000 tons of ore would be extracted. After the ore is removed, the land will have a resale value of $110,000.

To aid in the extraction, Marion built various structures and small storage buildings on the site at a cost of $127,500. These structures have a useful life of 10 years. The structures cannot be moved after the ore has been removed and will be left at the site. In addition, new equipment costing $102,000 was purchased and installed at the site. Marion does not plan to move the equipment to another site, but estimates that it can be sold at auction for $4,500 after the mining project is completed.

In 2021, 67,000 tons of ore were extracted and sold. In 2022, the estimate of total tons of ore in the mine was revised from 250,000 to 341,500. During 2022, 102,000 tons were extracted.

Required:
1. Compute depletion and depreciation of the mine and the mining facilities and equipment for 2021 and 2022. Marion uses the units-of-production method to determine depreciation on mining facilities and equipment.
2. Compute the book value of the mineral mine, structures, and equipment as of December 31, 2022.

Compute depletion and depreciation of the mine and the mining facilities and equipment for 2021 and 2022. Marion uses the units-of-production method to determine depreciation on mining facilities and equipment. (Do not round intermediate calculations.)

	2021 2022 Depletion Depreciation for Structures Depreciation for Equipment

Compute the book value of the mineral mine, structures, and equipment as of December 31, 2022. (Do not round intermediate calculations.)

	Book Value Mineral mine Structures Equipment

Answer 1

GIVEN THAT :-

According to the question we have that data is about the lands containing minaral mine purchased by the marion company

now we have

purchased land containing a mineral mine for $1,770,000

Additional costs of $590,000 were incurred to develop the mine

structures have a useful life of 10 years

new equipment costing $102,000 was purchased

now .

needed things			Mines he owned	Structure he created	Equipment he bought for used
Cost of assets		$2360000.00	$127500.00	$102000.00
Less: Salvage value		$110000.00	$0.00	4500.00$
Depreciation amount	$2250000.00	$127500.00	$97500.00
Estimated units of life	$250000.00	$250000.00	$250000.00
Depreciation per unit	9.00$	0.51$	0.39$
Units produced in 2018	67000.00$	67000.00$	67000.00$
Depreciation for the year 2018	603000.00	34170.00	26130.00
Book value in the beg. Of 2019	1757000.00	93330.00	75870.00
Less: salvage value		110000.00	0.00	4500.00
Depreciable amount		1647000.00	93330.00	71370.00
Divide: Revised life		274500.00	274500.00	274500.00
Depreciation per unit	6.00	0.34	0.26
Units produced in 2019	102000	102000	102000
Depreciation for 2019	612000	34680	26520
Book value at the end of 2019	1145000.00	58650.00	49350.00

TO FIND :- 1.Compute depletion and depreciation of the mine and the mining facilities and equipment for 2018 and 2019

now ,from the above table we have all the values given now taking them seperatly that we have

*the depriciation expense of year 2021 is :-

mines having in the year of 2021 is 603000

structures having in the year of 2021is  34170

equipement having in the year of 2021 is 26130

**the depriciation expense of year 2021 is :-

mines having in the year of 2022 is 612000

structures having in the year of 2022 is 34680

equpment having inthe year of 2022 is 26520

TO FIND :- 2.Compute the book value of the mineral mine, structures, and equipment as of December 31, 2022.

So now taking the values only inthe year 20220 according to the book value is given below

mines in the year 2022 is 1145000

structures in the year 2022 is 58650

equipment in the year 2022 is 49350

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