On May $1,$ Star Mines Inc. purchased an ore mine for $$8,400,000$ to access an estimated $4,354,000$ tons of ore. The

company also incurred development costs of $$630,000$ related to the mine and purchased equipment for $$1,260,000$

with a useful life of $15$ years and no salvage value. The equipment has alternative uses outside of this mine project.

The company is expected to restore the land after mining is complete. The present value of the restoration cost is

estimated to be $$280,000.$ The company extracted $504,000$ tons of ore during the year and sold $420,000$ tons. Hint: For

the purchase of this mine, an Asset Retirement Obligation is credited for the present value of restoration costs.

Required

a$.$ Record the entry for $(1)$ purchase and development costs of the mine and $(2)$ purchase of equipment on May $1.$

Assume all purchases were for cash.

b$.$ Record the entry for $(1)$ depletion of the ore and $(2)$ cost of sale of ore for the year.

c$.$ Calculate depreciation expense for the year, assuming that the company applies the straight$-$line depreciation

method, and applies the full$-$year, end of period convention.

a$.$

b$.$

Note: Use the depletion rate EXACTLY as shown above to calculate depletion below.

c$.$