In 20x0, the Tyra Corporation obtained the mining rights for a property in Northern Ontario for

$10,000,000. During the year 20x0, Tyra invested another $5,000,000 to build the infrastructure

of the mine. The mine became operational on December 31, 20x0. Tyra expects that the mine

will be operational for 15 years after which the site will have to be restored at a cost of

$8,000,000. The total output of the mine is expected to be 500,000 tonnes of ore. Tyra will be

using the units of production method of depreciation for both the mining rights and the

infrastructure.

Required

a) During 20x1 and 20x2, the total tonnes of ore mined was 27,300 and 36,000 respectively.

Assuming a discount rate of 5%, prepare all journal entries for the years ended December

31, 20x0, 20x1 and 20x2.

b) In 20x8, Tyra estimates that the total output of the mine will be 450,000 tonnes and that

the mine will be closing on December 31, 20x12. The cost to restore the site is now

estimated to be $8,500,000. Total tonnes mined to December 31, 20x7 was 210,000

tonnes. A total of 31,000 tonnes were extracted in 20x8. Assuming a discount rate of 4%,

prepare all journal entries for the year ended December 31, 20x8.