Question

Current Attempt in Progress On July 1, 2021, Teal Mountain Exploration invests $1.33 million in a mine that is estimated to have 750,000 tonnes of ore. The company estimates that the property will be sold for $100,000 when production at the mine has ended. During the last six months of 2021,100,000 tonnes of ore are mined and sold. Teal Mountain has a December 31 fiscal year end. Record the 2021 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 for the amounts. Round per tonne to 2 decimal places, eg. 5.27 and final answers to decimal places, eg. 5,276) Date Account Titles and Explanation Debit Credit Dec. 31 (To record depletion.)

Answer 1

Purchase price	$1,330,000
Salvage value	$100,000
Total estimated production	750,000	Tonnes
Depletion per unit	(Purchase price-Salvage value)/Total estimated production
	(1,330,000-100,000)/750,000
	$1.64	per Ton
Depletion expense for the year 2021
Total production in 2021 =	100,000 tonnes
Hence, depletion =	100,000 * 1.64
	$164,000
Date	Account titles	Debit	Credit
31-Dec	Depletion - Expense	$164,000
	To, accumulated depletion		$164,000
	(Being depletion for first year recorded)

*Feel free to ask any doubt related to this question in the comment section. Please give your valuable feedback.