Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on january 1, year 1, gemstone mining company (gmc

On January 1, Year 1, Gemstone Mining Company (GMC) paid $10,530,000 cash to purchase the...

70.2K

Verified Solution

Question

Accounting

On January 1, Year 1, Gemstone Mining Company (GMC) paid $10,530,000 cash to purchase the rights to extract raw stone from a surface pit estimated to hold 50,000 pounds of useable material. GMC extracted 13,000 pounds of stone in Year 1,24,200 pounds of stone in Year 2, and 28,000 pounds of stone in Year 3. The rights to the surface pit were expected to have a $530,000 salvage value at the end of Year 3. Which of the following statements models shows how recognizing depletion expense will affect GMCs Year 1 financial statements?
Balance Sheet Income Statement Cash Flow Statement
Assets = Liabilities + Equity
Cash + Stone Reserves Revenue Expenses = Net Income
A. NA + $(2,600,000)= NA + $(2,600,000) NA $2,600,000= $(2,600,000) NA
B. NA + $(2,600,000)= NA + $(2,600,000) NA $2,600,000= $(2,600,000) $(2,600,000) OA
C. NA + $(2,600,000)= NA + $(2,600,000) NA NA = NA NA
D. NA + $(2,600,000)= NA + $(2,600,000) NA NA = NA $(2,600,000) OA

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Hydrazine, N 2 H 4 , reacts with oxygen to form nitrogen gas and water. N...

Chemistry
Q

Please build the answer based on following text: Expense accounts include expenses incurred by an organization...

Accounting
Q

One predicted aspect of climate change is that levels of precipitation and temperature will become...

Biology
Q

17 Water falls from a height 500 m What is the rise in temperature of...

Physics
Q

17 The oscillation of a body on a smooth horizontal surface is represented by the...

Physics
Q

Simplify Express the answer with positive exponents 415 4 5 XAIN XO X ex 1...

Algebra
Q

The following condensed information was reported by Peabody Toys, Incorporated, for 2024 and 2023: Required:...

Accounting
Q

Mountain Air Coffee purchases green coffee beans from various suppliers and then roasts the coffee...

Accounting
Q

The entry to record the payment of a previously declared dividend of $2.50 per share...

Accounting
Q

Que Bentfield Industries is deciding whether to automate one phase of its production process. The...

Accounting
Q

Beaker Inc. currently reports a profit of $3.6 million. Divisional invested capital totals $9.5 million;...

Accounting
Q

kyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the companys...

Accounting