Flannery Company engages in the exploration and development of many types of natural resources. In the last two years, the company has engaged in the following activities: Jan. 1, 2016 Purchased for $205,000 a silver mine estimated to contain 782,000 tons of silver ore. July 1, 2016 Purchased for $2,060,000 cash a tract of land containing timber estimated to yield 3,050,000 board feet of lumber. At the time of purchase the land was estimated at $154,000 Feb. 1, 2017 Purchased for $728,000 a gold mine estimated to yield 30,100 tons of goldveined ore. Sept. 1, 2017 Purchased oil reserves for $776,000. The reserves were estimated to contain 263,000 barrels of oil, of which 25,000 would be unprofitable to pump. Required a. Prepare the journal entries to account for the following: (1) The 2016 purchases (2) Depletion on the 2016 purchases, assuming that 71,000 tons of silver were mined and 962,000 board feet of lumber were cut. (3) The 2017 purchases. 4) Depletion on the four natural resource assets, assuming that 62,000 tons of silver ore, 1,176,000 board feet of lumber, 8,700 tons of gold ore, and 80,000 barrels of oil were extracted. (Round all cost estimated to 2 decimal places and final answers to the nearest dollar amount. Enter depletion expenses in the given order. If no entry is required for a transaction/event, select No journal entry required" in the first account field.) X: Import a new list 10 1 Record purchase of the silver mine for cash. 2 Record purchase of the Timber and land for cash. 3 Record depletion expenses of the silver mine. 4 Record depletion expenses of the Timber. 5 Record purchase of the Gold Mine for cash. 6 Record purchase of the oil reserves for cash. 7 Record depletion expense of the silver mine. 8 Record depletion expense of the Timber. redit b. Prepare the portion of the December 31, 2017, balance sheet that reports natural resources. (Round your answers to the nearest dollar amount.) Natural Resources Silver mine (less depletion) Timber (less depletion) Gold mine (less depletion) Oil reserves (less depletion) Total natural resources 0 Land Total c. Assume that in 2018 the estimates changed to reflect only 53,280 tons of gold ore remaining. Prepare the depletion journal entry for 2018 to account for the extraction of 37,296 tons of gold ore. (Round intermediate calculation to 2 decimal places and final answers to nearest dollar amount. If no entry is required for a transactionlevent, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record depletion expenses of the gold mine. Note: Enter debits before credits. Date General Journal Debit Credit 2018
