At the beginning of 2018, Blue Dragon, a small private company,acquired a mine for $1,925,000. Of this amount, $190,000 wasallocated to the land value and the remaining portion to theminerals in the mine. Surveys conducted by geologists found thatapproximately 18 million units of ore appear to be in the mine.Blue Dragon had $175,000 of development costs for this mine beforeany extraction of minerals. It also determined that the fair valueof its obligation to prepare the land for an alternative use whenall of the minerals have been removed was $70,000. During 2018, 3.0million units of ore were extracted and 2.10 million of these unitswere sold.
Calculate the depletion cost per unit for 2018.(Round answer to 3 decimal places, e.g.52.751.)
Depletion Cost Per Unit: $________
Prepare the required journal entry, if any, for the total amountof depletion for 2018. (Credit account titles areautomatically indented when the amount is entered. Do not indentmanually. If no entry is required, select "No Entry" for theaccount titles and enter 0 for theamounts.)
Account Debit Credit
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________
Prepare the required journal entry, if any, for the total amountthat is charged as an expense for 2018 for the cost of mineralssold during 2018. (Credit account titles areautomatically indented when the amount is entered. Do not indentmanually. If no entry is required, select "No Entry" for theaccount titles and enter 0 for the amounts. Round answers to 0decimal places, e.g. 5,275.)
Account Debit Credit
______
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