(a) To record the purchase of the land.
Land $5,719,680
Cash$5,719,680
________________________________________
(b) To record the cost and installation of machinery.
Machinery $714,960
Cash$714,960
____________________________________________
(c) To record the first five months' depletion assuming the land has a net salvage value of zero after the ore is mined.
Depletion expense per ton = $5,719,680 / 7,944,000 = $0.72 per ton
Current year's depletion expense =407,000 x $0.72 = $293,040
Depletion Expense $293,040
Accumulated Depletion $293,040
_________________________________________________
(d) To record the first five months' depreciation on the machinery.
Cost of machinery = $714,960
Estimated life= 8 years
Depreciation per year = $714,960 / 8 = $89,370
Depreciation for 5 months = $89,370 x 5 / 12 = $37,237
Depreciation Expense $37,237
Accumulated Depreciation$37,237
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Check my work [The following information applies to the questions displayed below.] On July 23 of the current year, Dakota Mining Co. pays $4,715,000 for land estimated to contain 5,125,000 tons of recoverable ore. It installs and pays for machinery costing $410,000 on July 25 The company removes and sells 480.000 tons of ore during its first five months of operations ending on December 31. Depreciation of the machinery is in proportion to the mine's depletion as the machinery will...
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