Depletion Entries Alaska Mining Co acquired mineral rights f

Depletion Entries Alaska Mining Co. acquired mineral rights for $17,358,000. The mineral deposit is estimated at 78,900,000 tons. During the current year, 11,850,000 tons were mined and sold. a. Determine the amount of depletion expense for the current year. Round the depletion rate to two decimals places. $ b. Journalize the adjusting entry on December 31 to recognize the depletion expense.

Solution

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Cost of Mineral rights         17,358,000.00 Mineral deposit in tons         78,900,000.00 Extraction in current year         11,850,000.00 Amount of depletion expense = 17,358,000/78,900,000 * 11,850,000           2,607,000.00 Dr Cr b) Adjusting entry Depletion expense Dr           2,607,000.00 To Accumulated depletion     2,607,000.00