Mgmt_200_Spring_2008_solutions_3-19-08(3,21)

# Mgmt_200_Spring_2008_solutions_3-19-08(3,21) - \$765,000...

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Management 200 – Introductory Financial Accounting– Spring 2008 Krannert School of Management - Purdue University Solutions to class assignment for March 19, 2008 E8–16. 1. Computation of acquisition cost of the deposit in 2008: February 2008: Purchase of mineral deposit \$ 700,000 March 2008: Preparation costs 65,000 Total acquisition cost in 2008 \$ 765,000 2. Computation of depletion for 2008:
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Unformatted text preview: \$765,000 cost 900,000 cubic yards = \$.85 per cubic yard depletion rate 60,000 cubic yards in 2008 x \$.85 = \$51,000 3. Computation of net book value of the deposit after the developmental work: Total acquisition cost in 2008 \$ 765,000 Less: 2008 depletion (51,000) January 2009 developmental costs 6,000 Net book value \$ 720,000...
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## This note was uploaded on 11/22/2009 for the course MGMT 200 taught by Professor Greigg during the Spring '08 term at Purdue University-West Lafayette.

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