Mighty Mines paid $432,000 for the right to extract ore from a 425,000-ton mineral deposit. In addition to the purchase price, Mighty Mines also paid a $150 filing fee, a $2,700 license fee to the state of Colorado, and $92,150 for a geologic survey of the property. Because the company purchased the rights to the minerals only, it expected the asset to have zero residual value when fully depleted. During the first year of production, Mighty Mines removed 70,000 tons of ore. Make journal entries to record
(a) Purchase of the mineral rights
(b) Payment of fees and other costs
(c) Depletion for first-year production.
What is the mineral asset s book value at the end of the year?