AFTC Mining Company purchased a salt mine for $$16,500,000.$ The mine was estimated to

contain $3,250,000$ tons of ore and to have a residual value of $$750,000.$

During the first year of mining operations, $240,000$ tons of ore were mined, of which $180,000$

tons were sold.

Instructions:

a$)$ Prepare a journal entry to record the purchase of the mine. $($Use $$Salt Mine$$ as the

asset account$)$

b$)$ Prepare a journal entry to record depletion for the year.

c$)$ Show how the Northern Tier Mine, and its accumulated depletion, would appear in the

Salter Mining Company$$s balance sheet after the first year of Operations.

d$)$ Extra Credit: What would be recorded as depletion in year two if the company mined

$315,000$ tons and sold $350,000$ tons of salt? Include the journal entry.