Depletion question Instructions Caldwell Mining Co. acquired mineral rights for

Question

Depletion question

Instructions Caldwell Mining Co. acquired mineral rights for $311,250,000. The mineral deposit is estimated at 415,000,000 tons. During the current year, 40,479,000 tons were mined and sold. Required: A. Determine the depletion rate. B. Determine the amount of depletion expense for the current year. C. Journalize the adjusting entry on December 31 to recognize the depletion expense. Refer to the Chart of Accounts for exact wording of account titles. Starting Questions A. Determine the depletion rate. $ per ton B. Determine the amount of depletion expense for the current year.$

Explanation / Answer

A $               0.75 311250000/415000000 Per ton B $ 30,359,250 40479000*0.75 Date Account titles Debit $ Credit $ Depletion expense $     30,359,250.00 Mine account $            30,359,250

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