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  3. down deep mining co. acquired mineral rights for $

Down Deep Mining Co. acquired mineral rights for $45,000,000. The mineral deposit is estimated at...

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Accounting

Down Deep Mining Co. acquired mineral rights for $45,000,000. The mineral deposit is estimated at 30,000,000 tons. During the
current year, 8,700,000 tons were mined and sold.
a. Determine the depletion rate. If required, round your answer to two decimal places.
$
x per ton
b. Determine the amount of depletion expense for the current year.
$
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Similar to the units-of-production method to depreciate a fixed asset, the depletion rate that is calculated stays constant no
matter how much of the natural resource is extracted.
c. Journalize the adjusting entry on December 31 to recognize the depletion expense. If an amount box does not require an entry,
leave it blank.
Dec. 31
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