Calculate the depletion included in the income statement

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Reference no: EM133901562

Problem

On January 2, Year 1, Whistler Company purchased land for $480,000, from which it is estimated that 400,000 tons of ore could be extracted. It estimates that the present value of the cost necessary to restore the land is $56,000, after which it could be sold for $25,000. During Year 1, Whistler mined 81,000 tons and sold 63,000 tons. During Year 2, Whistler mined 107,000 tons and sold 108,000 tons. At the beginning of Year 3, Whistler spent an additional $110,000, which increased the reserves by 53,000 tons. In Year 3, Whistler mined 148,000 tons and sold 138,000 tons. Whistler uses a FIFO cost flow assumption. Get the instant assignment help. Calculate the depletion included in the income statement and ending inventory for Year 1, Year 2, and Year 3.

Reference no: EM133901562

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