Question

Depletion Entries Alaska Mining Co. acquired mineral rights for $9,432,000. The mineral deposit is estimated at 52,400,000 tons. During the current year, 7,850,000 tons were mined and sold. a. Determine the amount of depletion expense for the current year. Round the depletion rate to two decimal places. $fill in the blank b21c5bf8507dfbf_1 b. Journalize the adjusting entry on December 31 to recognize the depletion expense. If an amount box does not require an entry, leave it blank.

Answer 1

a.$1,413,000

b.Dr Depletion Expense $1,413,000

Cr Accumulated Depletion $1,413,000

Step-by-step explanation:

a. Calculation to determine the amount of depletion expense for the current year.

First step is calculate the depletion per ton

Depletion per ton=$9,432,000/52,400,000 tons Depletion per ton= $0.18 per ton

Now let calculate the depletion expense

Depletion expense =7,850,000 tons × $0.18

Depletion expense = $1,413,000

Therefore the amount of depletion expense for the current year is $1,413,000

b. Preparation of the adjusting entry on December 31 to recognize the depletion expense

Dr Depletion Expense $1,413,000

Cr Accumulated Depletion $1,413,000

(To record Depletion of mineral deposit)