Question
Barton Corporation acquires a coal mine at a cost of $1500000. Intangible development costs total $360000. After extraction has occurred, Barton must restore the property
Barton Corporation acquires a coal mine at a cost of $1500000. Intangible development costs total $360000. After extraction has occurred, Barton must restore the property (estimated fair value of the obligation is $180000), after which it can be sold for $510000. Barton estimates that 6000 tons of coal can be extracted. If 900 tons are extracted the first year, which of the following would be included in the journal entry to record depletion? (Round intermediate calculations to 2 decimal places, e.g. 20.25 and final answer to nearest dollar amount, e.g. 102456.)
Debit to Inventory for $229500
Credit to Accumulated Depletion for $382500
Debit to Accumulated Depletion for $229500
Credit to Inventory for $225000
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