Exercise 8. On July 1, 20X1, Hunt Inc. invested $800,000 in a mine estimated to have 800,000 tons of ore of uniform grade. The land is expected to be sold for $80,000 after the ore has been extracted. During the last 6 months of 20X1, 100,000 tons of were mined and sold.

a) Prepare the Adjusted Journal Entry to record this Deferred Cost at the end of the year.

b) If we assume that only 80,000 of the 100,000 tons mined in 20X1 were actually sold in this year, where would the cost of the 20,000 tons of unsold ore be reported.