Question

Montana Mining Co. pays $4,583,990 for an ore deposit containing 1,482,000 tons. The company installs machinery in the mine costing $227,500, which will be abandoned when the ore is completely mined. Montana mines and sells 168,300 tons of ore during the year Prepare the year-end 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.) View transaction list Journal entry worksheet Record the year-end adjusting entry for the depletion expense of ore mine. Note: Enter debits before credits. General Journal Debit Credit Dec 31

Answer 1

Solution comportation of depletion = depletion quantity & depletion rate per time = 168300 X ( 4583990/1482000) = 520570 Journal entries: Date 1 . General Journal Debit Gedet Dec 31 520570 Depletion expensez Accumulated depletion [ To record depletion expenses] 520570 Computation of depreciation experses ; Depreciation expersex = Amount x (depletion and sold / total quantity) = "729500 X (168300 / 1482000) 25835 Journal entrez pate General Journal Debit Gredet Dec 31 29835 poratleton exph. Acumulated depreciation [to record depreciation experses] 25835