Question

Required Information The following information applies to the questions displayed below On July 23 of the current year, Dakota Mining Co. pays $6.383.520 for land estimated to contain 8,184,000 tons of recoverable ore. It insta s and pays for machinery costing $1063.920 on July 25. The company removes and sells 420,750 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 w be abandoned after the one is mined. Required: Prepare entries to record the following. (Do not round your intermediate calculations. Round "Depletion per ton" to two decimal places and round all other answers to the nearest whole dollar.) (a) The purchase of the land. (b) The cost and Installation of machinery. (c) The first five months' depletion assuming the land has a net salvage value of zero after the ore is mined. (d) The first five months' depreciation on the machinery Complete this question by entering your answers in the tabs below. Required Required Required Required Required Required B C1 C2 D1 D2 Prepare the journal entry to record the purchase of the land. View transaction list Journal entry worksheet Record the cost of the ore mine of $6,383,520 cash. Note: Enter debits before credits Date General Journal Jul 223 Debit Credit Record entry Clear entry View general journal RE Required B >

Answer 1

A)

Date	General Journal	Debit	Credit
July 23	Mineral deposit	$6383520
	Cash		$6383520
	(To record cost of the ore mine)

B)

Date	General Journal	Debit	Credit
July 25	Machinery	$1063920
	Cash		$1063920
	(To record purchase of machinery)

C1)

Select formula for Units of Production Depletion
(Original cost-Salvage value)/Units of production
Calculate depletion expense:
Depletion per tone ($6383520-0)/8184000	$0.78
Tonnage	420750
Depletion expense	$328185

C2)

Date	General Journal	Debit	Credit
Dec 31	Depletion expense- Mineral deposit	$328185
	Accumulated depletion- Mineral deposit		$328185
	(To record depletion expense)

D1)

Select formula for Units of Production Depreciation
(Original cost-Salvage value)/Total units of production
Calculate depreciation expense:
Depreciation per tone ($1063920-0)/8184000	$0.13
Tonnage	420750
Depreciation expense	$54698

D2)

Date	General Journal	Debit	Credit
Dec 31	Depreciation expense- Machinery	$54698
	Accumulated Depreciation - Machinery		$54698
	(To record depreciation expense)