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At the beginning of 2020, Pronghorn Company acquired a mine for $1,732,800. Of this amount, $112,000 was ascribed to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists have indicated that approximately 11,600,000 units of ore appear to be in the mine. Pronghorn incurred $190,400 of development costs associated with this mine prior to any extraction of minerals. It also determined that the fair value of its obligation to prepare the land for an alternative use when all of the mineral has been removed was $44,800. During 2020, 2,718,000 units of ore were extracted and 2,310,000 of these units were sold.Required:a. Compute the total amount of depletion for 2020.b. Compute the amount that is charged as an expense for 2014 for the cost of the minerals sold during 2020.
Puffin Industries acquired all of Sunset Coast Digital's stock on January 1, 2014, for $3,500,000, $2,100,000 in excess of book value. At that time, Sunset Coast's inventory (LIFO) was overvalued by $500,000 and its plant assets (10-year life) were overvalued by $1,000,000. The remaining excess of cost over book value is attributed to undervalued identifiable intangible assets being amortized over 20 years. Sunset Coast depreciates plant assets and amortizes intangibles by the straight-line method. During 2014 and 2015, Sunset Coast reported total net income of $650,000 and paid out 50 percent in dividends. Puffin carries its investment in Sunset Coast using the complete equity method. Sunset Coast's inventory increased each year since it was acquired by Puffin, and Sunset Coast's reported net income for 2016 was $200,000, and dividends totaled 50 percent of reported income.Required:a. Compute Puffin's 2016 equity in net income of Sunset Coast. b. Compute the balance in the Investment in Sunset Coast account at December 31, 2016, after all equity method entries have been booked. c. Prepare the working paper eliminating entries needed in consolidation at December 31, 2016.
Fit-for-Life Foods reports the following income statement accounts for the year ended December 31. Gain on sale of equipment $6,350 Depreciation expenseOffice copier $600 Office supplies expense 770 Sales discounts 15,700 Insurance expense 1,240 Sales returns and allowances 4,000 Sales 215,000 TV advertising expense 2,100 Office salaries expense 31,500 Interest revenue 600 Rent expenseSelling space 11,000 Cost of goods sold 88,100 Sales staff wages 23,000 Sales commission expense 13,600Required:Prepare a multiple-step income statement.
Predetermined Overhead Rate, Application of Overhead to Jobs, Job Cost On April 1, Sangvikar Company had the following balances in its inventory accounts: Materials Inventory $12,670 Work-in-Process Inventory 21,090 Finished Goods Inventory 8,680 Work-in-process inventory is made up of three jobs with the following costs: Job 114 Job 115 Job 116 Direct materials $2,360 $2,647 $3,807 Direct labor 1,780 1,540 4,120 Applied overhead 1,157 1,001 2,678 During April, Sangvikar experienced the transactions listed below. Materials purchased on account, $28,520. Materials requisitioned: Job 114, $16,190; Job 115, $12,340; and Job 116, $4,850. Job tickets were collected and summarized: Job 114, 170 hours at $11 per hour; Job 115, 210 hours at $14 per hour; and Job 116, 90 hours at $17 per hour. Overhead is applied on the basis of direct labor cost. Actual overhead was $4,590. Job 115 was completed and transferred to the finished goods warehouse. Job 115 was shipped, and the customer was billed for 125 percent of the cost.Required:a. Calculate the predetermined overhead rate based on direct labor cost.b. Calculate the ending balance for each job as of April 30.