On April 2 2017 Montana Mining Co pays 3467770 for an ore de

On April 2, 2017, Montana Mining Co pays $3,467,770 for an ore deposit containing 1,578,000 tons. The company installs machinery in the mine costing $188,600, with an estimated seven-year life and no salvage value. The machinery will be abandoned when the ore is completely mined. Montana begins mining on May 1, 2017, and mines and sells 143,500 tons of ore during the remaining eight months of 2017 Prepare the December 31, 2017, entries to record both the ore deposit depletion and the mining machinery depreciation Mining machinery depreciation should be in proportion to the mine\'s depletion (Do not round intermediate calculations. Round your final answers to the nearest whole number) Journal entry worksheet Record the year-end adjusting entry for the depletion expense of ore mine Note Enter debits before ered ts Debili Credit Dec 31 o e

Solution

1. Profit and loss a/c. 332682

Oredeposit depltion a/c. 315532 (3467770*143500/1578000)

Machinery depreciation a/c. 17150

(188600*143500/1578000)