Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Backwoods Mining Co acquired mineral rights for $59.200,000. The mineral deposit is estimated at 10,000,000 tons. During the current year, 2,500,000 tons were mined and

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Backwoods Mining Co acquired mineral rights for $59.200,000. The mineral deposit is estimated at 10,000,000 tons. During the current year, 2,500,000 tons were mined and told Required: .. Determine the amount of depletion expense for the current year, b. Journalize the dusting entry on December 31 to recognize the depletion expense. Peter to the chart of accounts for the exact wording of the account titlos. CNOW Journals do not use lines for journal explanations. Every line on a journal page is used for debitor credit entries. CNOW journals will automatically indent a creditenay when a credit amount is entered ASSETS REVENUE 110 Cash 410 Sales 111 Petty Cash 610 Interest Revenue 112 Accounts Receivable 620 Gain on Sale of Delivery Truck 621 Gain on Sale of Equipment 114 Interest Receivable 115 Notes Receivable 622 Gain on Sale of Mineral Rights 116 Merchandise Inventory 117 Supplies EXPENSES 119 Prepaid Insurance 510 Cost of Merchandise Sold 120 Land 123 Delivery Truck 124 Accumulated Depreciation-Delivery Truck 125 Equipment 126 Accumulated Depreciation-Equipment 130 Mineral Rights 520 Salaries Expense 521 Advertising Expense 522 Depreciation Expense-Delivery Truck 523 Delivery Expense 524 Repairs and Maintenance Expense 529 Selling Expenses 131 Accumulated Depletion 531 Rent Expense 132 Goodwill 532 Depreciation Expense-Equipment 533 Depletion Expense 133 Patents 534 Amortization Expense-Patents 535 Insurance Expense LIABILITIES 210 Accounts Payable 536 Supplies Expense 539 Miscellaneous Expense 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable 710 Interest Expense 720 Loss on Sale of Delivery Truck 721 Loss on Sale of Equipment 722 Loss on Sale of Mineral Rights EQUITY 310 Owner's Capital 311 Owner's Drawing a. Determine the amount of depletion expense for the current year. $ b. Journalize the adjusting entry on December 31 to recognize the depletion expense. Refer to the chart of accounts for the exact wording of the account thes. CNOW journals do not use lines for journal explanations. Every Nne on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. PAGE 1 JOURNAL ACCOUNTING EQUATION DATE POST. REF. DEBIT CREDIT DESCRIPTION Adjusting Entries ASSETS LIABILITIES EQUITY 1 3

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Basic Accounting Concepts Principles And Procedures Volume 2

Authors: Gregory Mostyn, Worthy And James

1st Edition

0979149495, 9780979149498

More Books

Students also viewed these Accounting questions