Salter Mining Company purchased the Northern Tier Mine for $50 million cash. The mine was estimated to contain 6.47 million tons of ore and to have a residual value of $1.5 million. During the first year of mining operations at the Northern Tier Mine, 55,000 tons of ore were mined, of which 18,000 tons were sold. a. Prepare a journal entry to record depletion during the year. b. Show how the Northern Tier Mine, and its accumulated depletion, would appear in Salter Mining Company's balance sheet after the first year of operations.

Salter Mining Company purchased the Northern Tier Mine for $50 million cash. The mine was estimated to contain 6.47 million tons of ore and to have a residual value of $1.5 million. During the first year of mining operations at the Northern Tier Mine, 55,000 tons of ore were mined, of which 18,000 tons were sold. a. Prepare a journal entry to record depletion during the year. b. Show how the Northern Tier Mine, and its accumulated depletion, would appear in Salter Mining Company's balance sheet after the first year of operations.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 6PA: Gimli Miners recently purchased the rights to a diamond mine. It is estimated that there are one...

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Gimli Miners recently purchased the rights to a diamond mine. It is estimated that there are one million tons of ore within the mine. Gimli paid $23,100,000 for the rights and expects to harvest the ore over the next ten years. The following is the expected extraction for the next five years. Year 1: 50,000 tons Year 2: 90,000 tons Year 3: 100,000 tons Year 4: 110,000 tons Year 5: 130,000 tons Calculate the depletion expense for the next five years, and create the journal entry for year one.
Salter Mining Company purchased the Northern Tier Mine for $21 million cash. The mine was estimated to contain 2.5 million tons of ore and to have a residual value of $1 million. During the first year of mining operations at the Northern Tier Mine, 50,000 tons of ore were mined, of which 40,000 tons were sold. a. Prepare a journal entry to record depletion during the year. b. Show how the Northern Tier Mine, and its accumulated depletion, would appear in Salter Mining Company's balance sheet after the first year of operations. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Show how the Northern Tier Mine, and its accumulated depletion, would appear in Salter Mining Company's balance sheet after the first year of operations. (Amounts to be deducted should be indicated by a minus sign) Property, plant, & equipment Accumulated depletion Mining property: Northern Tier Mine Salter Mining Company Balance…
Salter Mining Company purchased the Northern Tier Mine for $21 million cash. The mine wasestimated to contain 2.5 million tons of ore and to have a residual value of $1 million.During the first year of mining operations at the Northern Tier Mine, 50,000 tons of ore weremined, of which 40,000 tons were sold.a. Prepare a journal entry to record depletion during the year.b. Show how the Northern Tier Mine, and its accumulated depletion, would appear in SalterMining Company’s balance sheet after the first year of operations. c. Will the entire amount of depletion computed in part a be deducted from revenue in the deter-mination of income for the year? Explain.
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