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b\'s Depr 101, CRwnt/Buy Books on Che x\'a Chegg Study ialded . X Show Me HowCaloustor Caldwell Mining Co. acquired mineral rights for $36,750,000. The mineral deposit is estimated at 35,000,000 tons. During the current year 10,850,000 tons were mined and sold a. Determine the depletion rate. If required, round your answer to two decimal places. per ton b. Determine the amount of depletion expense for the current year G. Journalize the adjusting entry on December 31 to recognize the depletion expense 0

Solution

Answer(a): Depletion Rate = Cost of resources / Estimated total units of resources

Depletion Rate = 36750000 / 35000000

Depletion Rate = 1.05 per ton

Answer(b): Depletion Expenses = Depletion rate * Units sold

Depletion Expenses = 1.05 * 10850000

Depletion Expenses = $11392500

(c): Journal entry:

	Particulars	Debit	Credit
Dec.31	Depletion Expenses	11392500
	Accumulated Depletion		11392500