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Girabaldi Corporation acquired the right to mine a piece of land at a cost to...

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Accounting

Girabaldi Corporation acquired the right to mine a piece of land at a cost to lease of $600,000. The related excavation costs were $1,000,000, while developmental costs were an additional $8,000,000, all of which will contribute to Girabaldi extracting 25,000 tonnes. In the first year of operations Girabaldi mined and sold 5,000 tonnes, while in its second year the company extracted 6,500 tonnes but only sold 6,000 tonnes. Instructions 1. Calculate the depletion cost per tonne. 2. Prepare the journal entry to record depletion expense for the first two years.

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