Exercise 8-18 Depletion of natural resources LO P1, P3

On April 2, 2017, Montana Mining Co. pays $3,387,850 for an ore deposit containing 1,464,000 tons. The company installs machinery in the mine costing $165,500, with an estimated sevenyear life and no salvage value. The machinery will be abandoned when the ore is completely mined. Montana begins mining on May 1, 2017, and mines and sells 133,600 tons of ore during the remaining eight months of 2017.

Prepare the December 31, 2017, entries to record both the ore deposit depletion and the mining machinery depreciation. Mining machinery depreciation should be in proportion to the mines depletion. (Do not round intermediate calculations. Round your final answers to the nearest whole number.)