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 $215,000 a silver mine estimated to contain 208,000 tons of silver ore. July 1, Year 1 Purchased for $2,090,000 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 $158,000. February 1, Year 2 Durchased for $787,000 a gold sine estimated to yield 29,200 tons of gold-veined ore. September 1, Year 2 Purchased oil reserves for $730,000. The reserves were estimated to contain 253,000 barrels of oil, of which 17,000 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 67000 tons of silver were mined and 961,000 board feet of lumber were cut (3) The Year 2 purchases (4) Depletion on the four natural resource assets, assuming that 63,000 tons of silver ore, 1.199,000 board feet of lumber 9,500 tons of gold 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 62,900 tons of gold ore remaining Prepare the depletion Journal entry in Year 3 to account for the extraction of 44,030 tons of gold ore Complete this question by entering your answers in the tabs below. Required A Required Required Prepare the journal entries to account for the following items. Assume all purchase transactions were made with cash (3) The Year 1 purchases, (2) Depletion on the Year 1 purchases, assuming that 67.000 tons of silver were mined and 961.000 board feet of lumber were cut. (3) The Year purchases. (4) Depletion on the four natural resource assets, assuming that 63,000 tons of silver ore, 1.199,000 board feet of lumber 9.500 tons of gold or und 77.000 barrels of oil were extracted. Round all antimated costs to 2 decimal places and final answer to the next dollar amount. Enter depletion expenses in the given order. If no untry is required for transaction/event, select "No journal entry in the first account field.) 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. ho 17 Record depletion expense of the silver mine. B Record depletion expense of the Timber Note: journal entry has been entered
