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Joe, Inc. acquires a copper mine at a cost of $1,000,000 in 2010. Intangible development...

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Accounting

Joe, Inc. acquires a copper mine at a cost of $1,000,000 in 2010. Intangible development costs are $240,000 and the cost of tangible equipment is $60,000. After extraction has occurred, Joe, Inc. must restore the property. The estimated fair value of the restoration cost is $40,000. The residual value of the copper mine is $100,000. It is estimated that 5,000 tons of copper can be extracted. In the year of acquisition, 2,100 tons were extracted and 500 tons were sold. How much cost of goods sold (depletion expense) should be recognized in 2010? What is ending inventory in 2010? What is the ending balance in the Copper Mine account?

Answer sheet says: COGS: 118,00, Ending Inventory: 377.600, Mine: 784,400

Please explain.

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