Problem 10-7A Natural resources LO P3 On July 23 of the current year, Dakota Mining Co. pays $6,995,520 for land estimated to contain 8,328,000 tons of recoverable ore. It installs machinery costing $1,665,600 that has a 10-year life and no salvage value and is capable of mining the ore deposit in eight years. The machinery is paid for on July 25, seven days before mining operations begin. The company removes and sells 426,750 tons of ore during its first five months of operations ending on December 31. Depreciation of the machinery is in proportion to the mine's depletion as the machinery will be abandoned after the ore is mined. Required: Prepare entries to record the following. (Do not round your intermediate calculations. Round "Depletion per ton" to two decimal places and round all other answers to the nearest whole dollar.) (a) To record the purchase of the land. (b) To record the cost and installation of machinery. (c) To record the first five months' depletion assuming the land has a net salvage value of zero after the ore is mined. (d) To record the first five months' depreciation on the machinery. Journal entry worksheet Record the cost of the ore mine of $6,995,520 cash. Note: Enter debits before credits. General Journal Debit Credit Date Jul 23 Record entry Clear entry View general journal Journal entry worksheet Record the cost of the machinery of $1,665,600 cash. Note: Enter debits before credits. General Journal Debit Credit Date Jul 25 Record entry Clear entry View general journal Journal entry worksheet Record the year-end adjusting entry for the depletion expense of ore mine. Note: Enter debits before credits. General Journal Debit Credit Date Dec. 31 Record entry Clear entry View general journal Select formula for Units of Production Depreciation: Calculate Depreciation expense: Depreciation per ton Tonnage Depreciation expense Journal entry worksheet Record the year-end adjusting entry for the depreciation expense of the machinery. Note: Enter debits before credits. Date General Journal Debit Credit Dec. 31 Record entry Clear entry View general journal