Tamarisk Corporation acquires a gold mine at a cost of 39600

Tamarisk Corporation acquires a gold mine at a cost of $396,000. Development costs that were incurred total $109,000, including $10,100 of depreciation on movable equipment to construct mine shafts. Based on construction to date, the legal obligation to restore the property after the mine is exhausted has a present value of $78,800. Tamarisk has publicly pledged an additional $18,900 (present value) for improved reclamation of the area surrounding the mine.

Prepare the journal entries to record the cost of the natural resource if Tamarisk prepares financial statements in accordance with IFRS.

________________DR
________________CR
(To record purchase of a gold mine.)
________________DR
________________CR
(To record movable equipment entry.)
________________DR
________________CR
( To record property reclamation obligation.)



Prepare the journal entries to record the cost of the natural resource if Tamarisk prepares financial statements in accordance with ASPE.

_________________DR
_________________CR
(To record purchase of a gold mine.)
_________________DR
_________________CR
(To record movable equipment entry.)
_________________DR
_________________CR
( To record property reclamation obligation.)

Tamarisk Corporation acquires a gold mine at a cost of $396,000. Development costs that were incurred total $109,000, including $10,100 of depreciation on movable equipment to construct mine shafts. Based on construction to date, the legal obligation to restore the property after the mine is exhausted has a present value of $78,800. Tamarisk has publicly pledged an additional $18,900 (present value) for improved reclamation of the area surrounding the mine.

Solution

Tamarisk Corporation acquires a gold mine at a cost of $396,000. Development costs that were incurred total $109,000, including $10,100 of depreciation on movable equipment to construct mine shafts. Based on construction to date, the legal obligation to restore the property after the mine is exhausted has a present value of $78,800. Tamarisk has publicly pledged an additional $18,900 (present value) for improved reclamation of the area surrounding the mine. Prepare the journal entries to record the cost of the natural resource if Tamarisk prepares financial statements in accordance with IFRS. General Journal Debit Credit Mineral resources ($396,000 + $109,000 - $10100) $494,900.00          Cash $494,900.00 (To record purchase of a gold mine.) Mineral Resources $10,100.00            Accumulated Depreciation - Equipment $10,100.00 (To record movable equipment entry.) Mineral Resources ($78,800 + $18,900) $97,700.00                    Asset Retirement Obligation $97,700.00 ( To record property reclamation obligation.) Prepare the journal entries to record the cost of the natural resource if Tamarisk prepares financial statements in accordance with ASPE. General Journal Debit Credit Mineral Resources $494,900.00          Cash $494,900.00 (To record purchase of a gold mine.) Mineral Resources $10,100.00            Accumulated Depreciation - Equipment $10,100.00 (To record movable equipment entry.) Mineral Resources $78,800.00                    Asset Retirement Obligation $78,800.00 ( To record property reclamation obligation.) ASPE Does not recognize constructive obligations