Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. computing and recording depletion expense in 2016,

Computing and Recording Depletion Expense In 2016, Eldenburg Mining Company purchased land for $3,600,000 that...

80.2K

Verified Solution

Question

Accounting

Computing and Recording Depletion Expense

In 2016, Eldenburg Mining Company purchased land for $3,600,000 that had a natural resource reserve estimated to be 500,000 tons. Development and road construction costs on the land were $210,000, and a building was constructed at a cost of $25,000. When the natural resources are completely extracted, the land has an estimated residual value of $600,000. In addition, the cost to restore the property to comply with environmental regulations is estimated to be $400,000. Production in 2016 and 2017 was 60,000 tons and 85,000 tons, respectively.

a. Compute the depletion charge for 2016 and 2017. (You should include depreciation on the building, if any, as part of the depletion charge.) (Do not round the depletion rate.)

2016 $Answer

2017 $Answer

b. Prepare a journal entry to record each year's depletion expense as determined in part a.

General Journal Date Description Debit Credit 2016 Answer Answer Answer Answer Answer Answer 2017 Answer Answer Answer Answer Answer Answer

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Statistics
1.2K views

You want to rent an unfurnished one-bedroom apartment in downtown San Diego next year. The mean...

Chemistry
1.2K views

Aspirin is produced by the reaction of salicylic acid (C7H6O3 . M = 138.1 g/mol) and...

Electrical Engineering
1.2K views

Homework 5 (Work Cell Safety) 1) Explain the operation of the Safety (Light) Curtain. 2) Explain the...

Accounting
1.2K views

ABC Company manufactures and sells a single product. The following information is available concerning the operations...

Calculus
1.2K views

3r If f x 2 cos x 0 x evaluate the left Riemann sum with...

Calculus
1.2K views

A website requires users to create a password that is 7 characters long. Each character...

Calculus
1.2K views

the Derivation of cartesian form from vector form Let the coordinates of the given point...

Algebra
1.2K views

12 In a semester of math class there are a total of 600 points that...

Accounting
1.2K views

Marriott, Yellow Cab, and NBC are pipeline businesses that have recently...

Accounting
1.2K views

Segn el sistema de inventario peridico, el costo de los bienes vendidos se determina al...

Accounting
1.2K views

Hills Inc. Consolidated statement of comprehensive income for the period ended 20X2 Sales 30,650 Cost...

Accounting
1.2K views

Given break-even sales in units of 56,000 and a unit contribution margin of $6, how...