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Everly Corporation acquires a coal mine at a cost of $602,000. Intangible development costs total $150,500. After extraction has occurred, Everly must restore the property
Everly Corporation acquires a coal mine at a cost of $602,000. Intangible development costs total $150,500. After extraction has occurred, Everly must restore the property (estimated fair value of the obligation is $120,400), after which it can be sold for $240,800. Everly estimates that 6,020 tons of coal can be extracted. If 1,054 tons are extracted the first year, prepare the journal entry to record depletion.
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