Learning explain the appropriate treatment required

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Learning Objective: 11-07 Explain the appropriate treatment required when an error in accounting for property; plant; and equipment and intangible assets is discovered. Spiceland - Chapter 11 #116 Topic: Determine periodic depreciation using both time-based and activity-based methods Topic: Explain the appropriate treatment required when an error in accounting for PP & E and intangible assets is discovered

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117. Zvinakis Mining Company paid \$200,000 for the rights to mine lead in southeast Missouri. The cost to drill and erect a mine shaft was \$2,400,000, and equipment to process the lead ore before shipment to the smelter was \$1,800,000. The mine is expected to yield 2,000,000 tons of ore during the five years it is expected to be operating. The equipment has an estimated residual value of \$150,000 when mining is concluded. The mine started operations on April 30, 2013. In 2013, 300,000 tons of ore were extracted, and in 2014, 700,000 tons were mined. Required: 1. Compute the depletion rate and the units-of-production depreciation rate. 2. Compute depletion and depreciation for 2013 and 2014. AACSB: Analytic AICPA FN: Measurement Blooms: Apply Difficulty: 3 Hard Learning Objective: 11-03 Calculate the periodic depletion of a natural resource. Spiceland - Chapter 11 #117 Topic: Calculate the periodic depletion of a natural resource
118. On February 20, 2013, Genoa Mining Company incurred costs of \$3,600,000 to acquire and prepare to extract an estimated 4,000,000 tons of mineral deposits. In 2013, 450,000 tons of ore were mined. At the beginning of 2014, Genoa geologists estimated that 3,900,000 tons of ore still remained. In 2014, 700,000 tons of ore were mined. Required: Compute depletion for 2013 and 2014. AACSB: Analytic AICPA FN: Measurement Blooms: Apply Difficulty: 3 Hard Learning Objective: 11-03 Calculate the periodic depletion of a natural resource. Spiceland - Chapter 11 #118 Topic: Calculate the periodic depletion of a natural resource

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119. On September 30, 2013, Morgan, Inc. acquired all of the outstanding common stock of Pathways, Inc., for \$100 million. In addition to tangible assets, Morgan recorded the following assets as a result of the acquisition: Morgan's policy is to amortize intangible assets using the straight-line method, no residual value, and a six-year useful life. Required: What is the total amount of expenses that would appear in Morgan's income statement for the year ended December 31, 2013, related to these items? Goodwill is not amortized. In-process research and development is not amortized. Amortization of the patent: (\$6,000,000 ÷ 6) x 3/12 = \$250,000 *Amortization of the developed technology: (\$3,000,000 ÷ 6) x 3/12 = \$125,000 AACSB: Analytic AICPA FN: Measurement Blooms: Apply Difficulty: 3 Hard Learning Objective: 11-04 Calculate the periodic amortization of an intangible asset.
Spiceland - Chapter 11 #119 Topic: Calculate the periodic amortization of an intangible asset 120. Meca Concrete purchased a mixer on January 1, 2011, at a cost of \$45,000. Straight-line depreciation for 2011 and 2012 was based on an estimated eight-year life and \$3,000 estimated residual value. In 2013, Meca revised its estimate and now believes the mixer will have a total service life of only six years, and that the residual value will be only \$2,000.

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