Sarasota Corporation, a publicly traded mining company, acquires a mine at a cos

Question

Sarasota Corporation, a publicly traded mining company, acquires a mine at a cost of $700,000. Capitalized development costs total $135,500. After the mine is depleted, $79,500 will be spent to restore the property, after which it can be sold for $160,500. Sarasota estimates that 5,000 tonnes of ore can be mined. Assuming that 840 tonnes are extracted in the first year, prepare the journal entry to record depletion. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round per tonne to 2 decimal places, e.g. 15.75 and final answer to 0 decimal places, e.g. 1,575.)

Account Titles and Explanation

Debit

Credit

_______________________

________________________

_______________________

Account Titles and Explanation

Debit

Credit

Explanation / Answer

cost per ton=(700000+135500+79500-160500)/5000= 150.9per ton

depletion expense=150.90*840=126756$

date titles debit credit 1 Depletion 126756 Mine asset 126756

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