9.Back on January 1, 2007 Crown Industries purchased production equipment for $150,000. The equipment had an expected life of five years and expected residual value of zero. The straight-line depreciation method is used by this company. All appropriate year-end depreciation has been recorded through December 31, 2010. Today, January 1, 2011, this machinery has been sold for $28,000 cash.
Required:
Enter this transaction into the accounting system using spreadsheet format.
Account ASSETS= LIABILITIES + OWNER’S EQUITY
10.In 2007, Bauxite Mining Company purchased a bauxite mine for $9,000,000. At the time of purchase, Bauxite estimated that the mine contained 500,000 tons of bauxite. Bauxite mined and sold 40,000 tons in 2007 and 85,000 tons in 2008.
Required:
a.What is the depletion rate per ton?
b.What amount of depletion should be reported 2007 and 2008?