# In April 2013, Sparkle Enterprises purchased the Crimson Mine at a cost of \$18,000,000. The mine is estimated to contain 500,000 tons of ore with a residual value of \$2,000,000 after mining operations are completed. During 2013, 120,000 tons of ore were removed from the mine and sold. In this situation: a. The book value of the mine is \$16,000,000 at the end of 2013. b. The amount of depletion deducted from revenue during 2013 is \$3,840,000. c. The amount of depletion deducted from revenue during 2013 is \$2,000,000. d. The mine is classified as an intangible asset with in indefinite life and is not amortized.

Explanation:

Giving the following information:

In April 2013, Sparkle Enterprises purchased the Crimson Mine for \$18,000,000. The mine is estimated to contain 500,000 tons of ore with a residual value of \$2,000,000 after mining operations are completed. During 2013, 120,000 tons of ore were removed from the mine and sold.

Annual depreciation= [(original cost - salvage value)/useful life of production in units]*units produced

Annual depreciation= (16,000,000/500,000)*120,000= \$3,840,000

## Related Questions

Kirnon Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 3,650 client-visits, but its actual level of activity was 3,590 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: Fixed element per monthVariable element per client-visit Revenue - \$39.90 Personnel expenses\$35,900 \$11.10 Medical supplies 1,900 7.90 Occupancy expenses 8,900 1.90 Administrative expenses 5,900 0.10 Total expenses\$52,600 \$21.00 The activity variance for administrative expenses in July would be closest to: Multiple Choice \$66 F \$6 U \$66 U \$6 F

\$666 Favorable

Explanation:

The computation of Activity variance is shown below:-

For computing the activity variance first we need to compute the Planning budget and flexible budget

Planning budget = \$35,900 + \$11.10 × 3,650

= \$76,415

Flexible budget = \$35,900 + \$11.10 × 3,590

= \$75,749

Activity variable = Activity variance - Flexible budget

= \$76,415 - \$75,749

= \$666 Favorable

Which of the following best describes why the predicted incremental earnings arising from a given decision are not sufficient in and of themselves to determine whether that decision is worthwhile? A) They do not show how the firm's earnings are expected to change as the result of a particular decision.
B) They are not easily predicted from historical financial statements of a firm and its competitors.
C) These earnings are not actual cash flows.
D) They do not tell how the decision affects the firm's reported profits from an accounting perspective.

C) These earnings are not actual cash flows.

Mansfield Corporation granted 4,200 of its \$2 par common shares to executives, subject to forfeiture if employment is terminated within three years. The common shares have a market price of \$10 per share on the grant date of the restricted stock award. Ignoring taxes, what is the compensation expense pertaining to the restricted shares in the first full year after the grant?

14,000

Explanation:

Given that,

Market value per share = 10

Shares granted = 4,200

Years of grant = 3

Total compensation expense = Market value per share × Shares granted

= 10 × 4,200

= 42,000

Compensation expense per year:

= Total compensation expense ÷ Years of grant

= 42,000 ÷ 3

= 14,000

The compensation expense pertaining to the restricted shares in the first full year after the grant is \$14,000.

### Explanation:

The compensation expense pertaining to the restricted shares in the first full year after the grant can be calculated by multiplying the number of shares granted by the fair value of the shares on the grant date. In this case, 4,200 shares were granted and the fair value was \$10 per share, so the total value of the shares is \$42,000.

Since the shares are subject to forfeiture if employment is terminated within three years, the compensation expense is recognized over a three-year vesting period.

Therefore, the compensation expense pertaining to the restricted shares in the first full year after the grant would be \$42,000 divided by three years, which is \$14,000.

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If wages grew 4.80 percent, but inflation was 3.60 percent, what was the approximate real increase in wages? (Enter your answer as a percent rounded to 2 decimal places.)

1.2%

Explanation:

The increase in wages must be bench-marked with the rate of inflation because  the increase in wages does not determine your purchasing power, If the rate of inflation exceeds the percentage increase wages, your purchasing power is is declining all things being equal..

The real increase in wages = Percentage increase in wages - Inflation rate

= 4.80 percent - 3.60 percent

=  4.80% - 3.60%

=  1.2%

Therefore the approximate real increase in wages is 1.2%

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