On April 2 2017, Montana Mining Co. pays $4,913,880 for an ore deposit containin

Question

On April 2 2017, Montana Mining Co. pays $4,913,880 for an ore deposit containing 1,405,000 tons. The company Installs machinery In the mine costing $159,100, with an estimated seven-year life and no salvage value. The machinery will be abandoned when the ore Iis completely mined. Montana begins mining on May 1, 2017, and mines and sells 147,600 tons of ore during the remalning eight months of 2017 Prepare the December 31, 2017, entries to record both the ore deposit depletion and the mining machinery depreclation. Mining machinery depreclation should be In proportion to the mine's depletion. (Do not round Intermediate calculations. Round your final answers to the nearest whole number.) View transaction list View journal entry worksheet No Date General Journal Debit Credit Dec 31 Depletion expense-Mineral deposit Accumulated depletion-Mineral deposit 2 Dec 31 Accumulated depreciation-Machinery 2 Dec 31

Explanation / Answer

journal Entry Accounting titles & Explanation Debit Credit Depletion expense-mineral deposit 516220 Accumulated depreciation-mineral deposit 516220 (4,913,880/1,405,000)*147,600 Depreciation expense-Machinery 16714 Accumulated depreciation-Machinery 16714 (159,100/1,405,000)*147600

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