9. A firm began a mineral exploitation venture during the current year by spending( 1) $ 40 million for the mineral rights;( 2) $ 100 million exploring for the minerals, one-fourth of which were successful; and( 3) $ 60 million to develop the site. Management estimated that 20 million tons of ore would ultimately be removed from the property. Wages and other extraction costs for the current year amounted to $ 10 million. In total, 2 million tons of ore were removed from the deposit in the current year. The entire production for the period was sold. Compute cost of goods sold under the successful efforts method.
10. Spiro Corp. uses the sum-of-the-years ' digits method to depreciate equipment purchased in January 2003 for $ 20,000. The estimated salvage value of the equipment is $ 2,000, and the estimated useful life is four years. What should Spiro report as the asset ' s carrying amount as of December 31, 2005?
11. A depreciable asset has an estimated 15 % salvage value. Under which of the following methods, properly applied, would the accumulated depreciation equal the original cost at the end of the asset’ s estimated useful life? 12. What amount should Ichor report as depreciation expense for 2005? 13. Grayson Co. incurred significant costs in defending its patent rights. Which of the following is the appropriate treatment of the related litigation costs?
14. On April 1, 2004, Kew Co. purchased new machinery for $ 300,000. The machinery has an estimated useful life of five years, and depreciation is computed by the sum-of-the-years '-digits method. The accumulated depreciation on this machinery at March 31, 2006 should be:
15. Stam Co. incurred the following research and development project costs during the current year: 16. The equipment has a five-year useful life and is depreciated using the straight-line method. What amount should Stam recognize as research and development expense at year end?