Depletion Entries

Backwoods Mining Co. acquired mineral rights for $21,648,000. The mineral deposit is estimated at 135,300,000 tons. During the current year, 20,300,000 tons were mined and sold.

a. Determine the amount of depletion expense for the current year. Round the depletion rate to two decimal places.

b. Journalize the adjusting entry on December 31 to recognize the depletion expense. If an amount box does not require an entry, leave it blank.

Fixed Asset Turnover Ratio

FedEx Corporation and United Parcel Service, Inc. compete in the package delivery business. The major fixed assets for each business include aircraft, sorting and handling facilities, delivery vehicles, and information technology. The sales and average book value of fixed assets reported on recent financial statements for each company were as follows:

	FedEx			UPS
Sales (in millions)		$65,450			$71,861
Average book value of fixed assets (in millions)		27,068			24,347

a. Compute the fixed asset turnover ratio for each company. Round to one decimal place.