Depletion A coal mine was acquired at a cost of $1,500,000 and estimated to contain 6,000,000...

Depletion

A coal mine was acquired at a cost of $1,500,000 and estimated to contain 6,000,000 tons of ore. During the year, 100,000 tons were mined and sold. Prepare the journal entry for the year's depletion expense. If an amount box does not require an entry, leave it blank.

A silver mine was acquired at a cost of $3,000,000 and estimated to contain 750,000 tons of ore. During the year, 125,000 tons were mined and sold. Prepare the journal entry for the year's depletion expense. If an amount box does not require an entry, leave it blank.

Prepare the entries using a general journal.

there are 2 entries per journal

Solutions

Expert Solution

ekkarill92 answered 1 month ago

Next > < Previous

Related Solutions

Depletion On July 1, 2019, Amplex Company purchased a coal mine for $2 million. The estimated...

Depletion On July 1, 2019, Amplex Company purchased a coal mine for $2 million. The estimated capacity of the mine was 800,000 tons. During 2019, Amplex mines 10,000 tons of coal per month and sells 9,000 tons per month. The selling price is $30 per ton and production costs (excluding depletion and depreciation) are $8 per ton. At the end of the mine's life, Amplex estimates that the present value of the cost to restore the land is $300,000, after...

Herr Mining Company plans to open a new coal mine. Developing the mine will cost $10...

Herr Mining Company plans to open a new coal mine. Developing the mine will cost $10 million right away, but cash flows of $3 million will arrive starting in one year and then continuing for the next four years (i.e., years 2 through 5). After that, no coal will remain, and Herr must spend 21 million to restore the land surrounding the mine to its original condition. a. Construct a timeline showing the cash flows starting at time zero and...

Problem 1: Depletion allowance Gunslinger Oil Company purchased for $38,000,000 an oil well estimated to contain...

Problem 1: Depletion allowance Gunslinger Oil Company purchased for $38,000,000 an oil well estimated to contain 1.2 million barrels of crude oil. When the oil is completely extracted, it is expected that the lead will be worth $1,400,000. A building and equipement costing $6,600,000 were constructed on the mine site, and they will be completely used up and have no salvage value when the oil is exhausted. During the first year, $78,000 barrels of oil was extracted, and $487,500 was...

Last Chance Mine (LCM) purchased a coal deposit for $2,214,900. It estimated it would extract 20,700...

Last Chance Mine (LCM) purchased a coal deposit for $2,214,900. It estimated it would extract 20,700 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.44 million, $8.2 million, and $3.2 million for years 1 through 3, respectively. During years 1–3, LCM reported net income (loss) from the coal deposit activity in the amount of ($12,800), $590,000, and $540,000, respectively. In years 1–3, LCM actually extracted 21,700 tons of coal as follows:...

Last Chance Mine (LCM) purchased a coal deposit for $1,117,500. It estimated it would extract 14,900...

Last Chance Mine (LCM) purchased a coal deposit for $1,117,500. It estimated it would extract 14,900 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.13 million, $7.25 million, and $5.7 million for years 1 through 3, respectively. During years 1–3, LCM reported net income (loss) from the coal deposit activity in the amount of ($17,200), $582,500, and $535,000, respectively. In years 1–3, LCM actually extracted 15,900 tons of coal as follows:...

Last Chance Mine (LCM) purchased a coal deposit for $1,334,750. It estimated it would extract 14,050...

Last Chance Mine (LCM) purchased a coal deposit for $1,334,750. It estimated it would extract 14,050 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.01 million, $4 million, and $2.9 million for years 1 through 3, respectively. During years 1–3, LCM reported net income (loss) from the coal deposit activity in the amount of ($13,800), $592,500, and $522,500, respectively. In years 1–3, LCM actually extracted 15,050 tons of coal as follows:...

Last Chance Mine (LC) purchased a coal deposit for $750,000. It estimated it would extract 12,000...

Last Chance Mine (LC) purchased a coal deposit for $750,000. It estimated it would extract 12,000 tons of coal from the deposit. LC mined the coal and sold it, reporting gross receipts of $1 million, $3 million, and $2 million for years 1 through 3, respectively. During years 1–3, LC reported net income (loss) from the coal deposit activity in the amount of ($20,000), $500,000, and $450,000, respectively. In years 1–3, LC actually extracted 13,000 tons of coal as follows:...

Last Chance Mine (LCM) purchased a coal deposit for $2,883,500. It estimated it would extract 18,250...

Last Chance Mine (LCM) purchased a coal deposit for $2,883,500. It estimated it would extract 18,250 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.30 million, $8.35 million, and $6.2 million for years 1 through 3, respectively. During years 1–3, LCM reported net income (loss) from the coal deposit activity in the amount of ($10,400), $520,000, and $282,500, respectively. In years 1–3, LCM actually extracted 19,250 tons of coal as follows:...

ABC, Inc. purchased for $3,800,000 a mine estimated to contain 2.5 million tons of ore. When...

ABC, Inc. purchased for $3,800,000 a mine estimated to contain 2.5 million tons of ore. When the ore is completely extracted, it was expected that the land would be worth $200,000. A building and equipment costing $1,800,000 were constructed on the mine site, and they will be completely used up and have no salvage value when the ore is exhausted. During the first year, 750,000 tons of ore were mined, and $300,000 was spent for labor and other operating costs....

Solare Company acquired mineral rights for $60,000,000. The diamond deposit is estimated at 6,000,000 tons. During the current...

Solare Company acquired mineral rights for $60,000,000. The diamond deposit is estimated at 6,000,000 tons. During the current year, 2,300,000 were mined and sold. a. Determine the depletion rate. b. Determine the amount of depletion expense for the current year. c. Journalize the adjusting entry to recognize the depletion expens

Subjects