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Home Q & A Board Other Fields Homework Help Business Accounting
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amanam amanam
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5 years ago
MacLean Corp. purchased a mine on January 1, 2016, for $500,000 .The mine is estimated to contain 30,000 tons of iron ore. There is no residual value. The business has extracted and sold 2,500 tons of ore in 2016. Prepare the journal entry to record depletion expense for 2016. (Round your intermediate calculations to the nearest cent.)
Textbook 
Horngren's Accounting

Horngren's Accounting


Edition: 11th
Authors:
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Replies
wrote...
#1
5 years ago
 
Depletion ExpenseMine41,675
      Accumulated DepletionMine41,675

Explanation:
Depletion per unit = (Cost - Residual value) / Estimated total units
Depletion per unit = ($500,000 - $0) / 30,000 = $16.67 per ton
Depletion expense = Depletion per unit  Number of units extracted
Depletion expense for year 2016 = $16.67  2,500 tons = $41,675
amanam Author
wrote...
#2
5 years ago
Good timing, thanks!
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