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:

January 1, Year 1 Purchased for $190,000 a silver mine estimated to contain 768,000 tons of silver ore.

July 1,

Year 1 Purchased for $1,830,000 cash a tract of land containing timber estimated to yield 3,060,000 board

feet of lumber. At the time of purchase, the land had an appraised of $186,000.

February 1, Year 2 Purchased for $735,000 a gold mine estimated to yield 29,300 tons of gold-veined ore.

September 1,

Year 2 Purchased oil reserves for $784,000. The reserves were estimated to contain 254,000 barrels of oil,

of which 15,000 would be unprofitable to pump.

Required

a. Prepare the journal entries to account for the following items. Assume all purchase transactions were made with cash.

1. The Year 1 purchases
2. Depletion on the Year 1 purchases, assuming that 65,000 tons of silver were mined and 956,000 board feet of lumber were cut.
3. The Year 2 purchases.
4. Depletion on the four natural resource assets, assuming that 61,000 tons of silver ore, 1,174,000 board feet of lumber, 8,600 tons of gold ore, and 77,000 barrels of oil were extracted.

1. Prepare the portion of the December 31, Year 2, balance sheet that reports natural resources.
2. Assume that in Year 3 the estimates changed to reflect only 47,360 tons of gold ore remaining. Prepare the depletion journal entry in Year 3 to account for the extraction of 33,152 tons of gold ore.

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: January 1, Year 1 Turchased for $190,000 a siver nine estimated to contain 768,000 tons of silver ore. July:1, Yesr 1 purehased for $1,630,000 cash a tract of land contaising timber estimated to yield 3,060,000 board feet of lumber. At the elme of perehase, the land had an appraited of $166,000. February 1, Yeaf 2 Purchased for $735,000 a gold mine estiated to yield 29, 300 tesa of gold-velned ore. of which 15,000 would be unprofiteble to punp. Required a. Prepare the journal entries to account for the following items. Assume all purchase transactions were made with cash. (1) The Year 1 purchases. (2) Depletion on the Year 1 purchases, assuming that 65,000 tons of silver were mined and 956,000 board feet of lumber were cut. (3) Year 2 purchases. (4) Depletion on the four natural resource assets, assuming that 61,000 tons of silver ore, 1,174,000 board feet of lumber, 8,600 tons of goid ore, and 77,000 barrels of oll were extracted. b. Prepare the portion of the December 31, Year 2, balance sheet that reports natural resources. c. Assume that in Year 3 the estimates changed to reflect only 47,360 tons of gold ore remaining. Prepare the depletion journal entry in Year 3 to account for the extraction of 33,152 tons of gold ore. Complete this question by entering your answers in the tabs below. Prepare the journal entries to account for the following items. Assume all purchase transactions were made with cash, (1) The Year 1 purchases. (2) Depletion on the Year 1 purchases, assuming that 65,000 tons of silver were mined and 956,000 board feet of lumber were cut. (3) The Year 2 purchases