Green Mining paid $500,000 to acquire a mine with 25,000 tons of coal reserves. The following statements

Question:

Green Mining paid $500,000 to acquire a mine with 25,000 tons of coal reserves. The following statements model reflects Green Mining financial condition just prior to purchasing the coal reserves. The company extracted 12,000 tons of coal in year 1 and 15,000 tons in year 2.

Required
a. Compute the depletion charge per unit.
b. Record the acquisition of the coal reserves and the depletion expense for years 1 and 2 in a financial statements model like the preceding one.
c. Prepare the general journal entries to record the depletion expense for years 1 and2.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...