need help to resolve this question please. thank you Exercise 8-18 Depletion of
ID: 2467262 • Letter: N
Question
need help to resolve this question please. thank you
Exercise 8-18 Depletion of natural resources LO P1, P3 On April 2, 2015, Montana Mining Co. pays $3,779,530 for an ore deposit containing 1,413,000 tons. The company installs machinery in the mine costing $201,500, with an estimated seven-year life and no salvage value. The machinery will be abandoned when the ore is completely mined. Montana begins mining on May 1, 2015, and mines and sells 138,300 tons of ore during the remaining eight months of 2015.
Prepare the December 31, 2015, entries to record both the ore deposit depletion and the mining machinery depreciation. Mining machinery depreciation should be in proportion to the mine’s depletion. (Do not round intermediate calculations. Round your final answers to the nearest whole number.)
Explanation / Answer
solution :
DATE ACCOUNT TITLE DEBIT CREDIT Dec-31 ore deposit depletion 369,929 accumulated depletion 369,929 (3779530*138300/1413000) Dec-31 Depreciation 19,722 accumulated depreciation 19,722 (201500*138300/1413000)Related Questions
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