Page 119 - Demo

Ch(5): Plant Assets Disposal1161-Depletion Cost per Unit=TotalCost%u2212SalvageValueTotalEstimatedUnits= 5,000,000%u2212010,000,000= BD0.5 per unitAnnual depletion Expense =Depletion Cost per Unit %u00d7Number of units Extracted and SoldAnnualPeriodDepreciation for the periodEnd of PeriodActivityUnitsDepletion Cost per UnitDepletionExpenseAccumulatedDepletionBook Value1/1/2014----5,000,00020143,000,000%u00d7 0.5=1,500,0001,500,0003,500,00020152,500,000%u00d70.5=1,250,0002,750,0002,250,00020162,000,000%u00d70.5=1,000,0003,750,0001,250,00020171,500,000%u00d70.5=750,0004,500,000500,00020181,000,000%u00d70.5=500,0005,000,00002-Journal Entry should:DateExplanationDebitCreditDec,31Depletion Expense1,500,0002014Accumulated Depletion1,500,000Note: In the method of consuming natural resources, the date of investment or extraction is ignored because it depends on theunits extracted.