Question

Alaska Mining Co. acquired mineral rights for $10,598,000. The mineral deposit is estimated at 75,700,000 tons. During the current year, 11,350,000 tons were mined and sold. a. Determine the amount of depletion expense for the current year. Round the depletion rate to two decimals places. b. Journalize the adjusting entry on December 31 to recognize the depletion expense.

Answer 1

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A B С D E 1 2 3 Acquistion mineral rights Estmated tons Depletion per ton 10598000 75700000 tons 0.14 per ton 4 5 6 7 Current depletion tons Depletion per ton Depletion expense for current year 11350000 tons 0.14 per ton 1589000 8 9 10 Debit Credit 11 Account title Depletion Expense Mineral Mine 1589000 12 1589000 13

For calculation ref:

А B с D 1 N 3 Acquistion mineral rights Estmated tons Depletion per ton 10598000 75700000 tons =C2/C3 per ton 4 5 6 7 Current depletion tons 11350000 tons Depletion per ton =C4 per ton Depletion expense for current year |=C6*C7 8 9 10 Credit Account title Depletion Expense Mineral Mine Debit =C8 11 12 =C11 13