In January 2016, Omi Mining Corporation purchased a mineral mine for $4,200,000 with removable ore estimated by geological surveys at 2,500,000 tons. The property has an estimated value of $400,000 after the ore has been extracted. Omi incurred $1,150,000 of development costs preparing the property for the extraction of ore. During 2016, 340,000 tons were removed and 300,000 tons were sold.

Required:

i) Prepare the journal entry to record depletion for the year ended December 31, 2016, Omi does not use the accumulated depletion account.

ii) For the year ended December 31, 2016, Omi should include what amount of depletion in its cost of goods sold? Prepare the necessary journal entry.