A company acquires a zinc mine at a cost of $750,000 on January 1.
At that same time, it incurs additional costs of $100,000 to access the mine, which is estimated to hold 200,000 tons of zinc. The estimated value of the land after the zinc is removed is $50,000.
1. Prepare the January 1 entry(ies) to record the cost of the zinc mine.
2. Prepare the December 31 year-end adjusting entry if 50,000 tons of zinc are mined, but only 40,000 tons are sold the first year.