On April 2, 2009, Mitzu Mining Co. pays $3,920,000 for an ore deposit containing 1,400,000 tons. The
company installs machinery in the mine costing $210,000, with an estimated seven-year life and no salvage
value. The machinery will be abandoned when the ore is completely mined. Mitzu begins mining
on May 1, 2009, and mines and sells 178,200 tons of ore during the remaining eight months of 2009.
Prepare the December 31, 2009, 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.
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