Question 1 Caldwell Mining Co acquired mineral rights for $164,861,000 The mineral deposit is estimated at 402,100,000 tons During the current year, 49,937,000 tons were mined and sold Required A Determine the depletion rate B Determine the amount of depletion expense for the current year C Journalize the adjusting entry on December 31 to recognize the depletion expense Refer to the Chart of Accounts for exact wording of account titles A Determine the depletion rate per ton B Determine the amount of depletion expense for the current year CHART OF ACCOUNTS Caldwell Mining Co General Ledger ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 114 Interest Receivable 115 Notes Receivable 116 Merchandise Inventory 117 Supplies 119 Prepaid Insurance 120 Land 123 Delivery Truck 124 Accumulated Depreciation Delivery Truck 125 Equipment 126 Accumulated Depreciation Equipment 130 Mineral Rights 131 Accumulated Depletion 132 Goodwill 133 Patents LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Owner, Capital 311 Owner, Drawing 312 Income Summary REVENUE 410 Sales 610 Interest Revenue 620 Gain on Sale of Delivery Truck 621 Gain on Sale of Equipment 622 Gain on Sale of Mineral Rights EXPENSES 510 Cost of Merchandise Sold 520 Salaries Expense 521 Advertising Expense 522 Depreciation Expense Delivery Truck 523 Delivery Expense 524 Repairs and Maintenance Expense 529 Selling Expenses 531 Rent Expense 532 Depreciation Expense Equipment 533 Depletion Expense 534 Amortization Expense Patents 535 Insurance Expense 536 Supplies Expense 539 Miscellaneous Expense 710 Interest Expense 720 Loss on Sale of Delivery Truck 721 Loss on Sale of Equipment 722 Loss on Sale of Mineral Rights C Journalize the adjusting entry on December 31 to recognize the depletion expense Refer to the Chart of Accounts for exact wording of account titles PAGE 1 JOURNAL DATE DESCRIPTION POST REF DEBIT CREDIT 1 Adjusting Entries 2 3 Question 2 Prior to adjustment at the end of the year, the balance in Trucks is $297,013 and the balance in Accumulated DepreciationTrucks is $102,180 Details of the subsidiary ledger are as follows Estimated Accumulated Depreciation at Miles Operated Truck No Cost Residual Value Useful Life Beginning of Year During Year 1 $80,302 $15,380 249,700 miles 20,300 2 51,225 5,730 303,300 miles $14,540 32,100 3 79,600 12,940 202,000 miles 62,350 8,100 4 85,886 23,330 240,600 miles 25,290 22,000 Required A Determine the depreciation rates per mile and the amount to be credited to the accumulated depreciation section of each of the subsidiary accounts for the miles operated during the current year B Journalize the entry to record depreciation for the year Refer to the Chart of Accounts for exact wording of account titles A Determine the depreciation rates per mile and the amount to be credited to the accumulated depreciation section of each of the subsidiary accounts for the miles operated during the current year Truck No Rate per Mile Miles Operated Credit to Accumulated Depreciation 1 20,300 2 32,100 3 8,100 4 22,000 Total CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 114 Interest Receivable 115 Notes Receivable 116 Merchandise Inventory 117 Supplies 119 Prepaid Insurance 120 Land 123 Trucks 124 Accumulated Depreciation Trucks 125 Equipment 126 Accumulated Depreciation Equipment 130 Mineral Rights 131 Accumulated Depletion 132 Goodwill 133 Patents LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Owner, Capital 311 Owner, Drawing 312 Income Summary REVENUE 410 Sales 610 Interest Revenue 620 Gain on Sale of Trucks 621 Gain on Sale of Equipment EXPENSES 510 Cost of Merchandise Sold 520 Salaries Expense 521 Advertising Expense 522 Depreciation Expense Trucks 523 Delivery Expense 524 Repairs and Maintenance Expense 529 Selling Expenses 531 Rent Expense 532 Depreciation Expense Equipment 533 Depletion Expense 534 Amortization Expense Patents 535 Insurance Expense 536 Supplies Expense 539 Miscellaneous Expense 710 Interest Expense 720 Loss on Sale of Trucks 721 Loss on Sale of Equipment B Journalize the entry to record depreciation for the year Refer to the Chart of Accounts for exact wording of account titles PAGE 1 JOURNAL DATE DESCRIPTION POST REF DEBIT CREDIT 1 Adjusting Entries 2 3

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Question 1 Caldwell Mining Co. acquired mineral rights for $164,861,000. The mineral deposit is estimated at 402,100,000 tons. During the current year, 49,937,000 tons were

Question 1

Caldwell Mining Co. acquired mineral rights for $164,861,000. The mineral deposit is estimated at 402,100,000 tons. During the current year, 49,937,000 tons were mined and sold.

	Required:
A.	Determine the depletion rate.
B.	Determine the amount of depletion expense for the current year.
C.	Journalize the adjusting entry on December 31 to recognize the depletion expense. Refer to the Chart of Accounts for exact wording of account titles.

A. Determine the depletion rate. per ton

B. Determine the amount of depletion expense for the current year.

CHART OF ACCOUNTS

Caldwell Mining Co.

General Ledger

	ASSETS
110	Cash
111	Petty Cash
112	Accounts Receivable
114	Interest Receivable
115	Notes Receivable
116	Merchandise Inventory
117	Supplies
119	Prepaid Insurance
120	Land
123	Delivery Truck
124	Accumulated Depreciation-Delivery Truck
125	Equipment
126	Accumulated Depreciation-Equipment
130	Mineral Rights
131	Accumulated Depletion
132	Goodwill
133	Patents

	LIABILITIES
210	Accounts Payable
211	Salaries Payable
213	Sales Tax Payable
214	Interest Payable
215	Notes Payable

	EQUITY
310	Owner, Capital
311	Owner, Drawing
312	Income Summary

	REVENUE
410	Sales
610	Interest Revenue
620	Gain on Sale of Delivery Truck
621	Gain on Sale of Equipment
622	Gain on Sale of Mineral Rights

	EXPENSES
510	Cost of Merchandise Sold
520	Salaries Expense
521	Advertising Expense
522	Depreciation Expense-Delivery Truck
523	Delivery Expense
524	Repairs and Maintenance Expense
529	Selling Expenses
531	Rent Expense
532	Depreciation Expense-Equipment
533	Depletion Expense
534	Amortization Expense-Patents
535	Insurance Expense
536	Supplies Expense
539	Miscellaneous Expense
710	Interest Expense
720	Loss on Sale of Delivery Truck
721	Loss on Sale of Equipment
722	Loss on Sale of Mineral Rights

C. Journalize the adjusting entry on December 31 to recognize the depletion expense. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1		Adjusting Entries
2
3

Question 2

Prior to adjustment at the end of the year, the balance in Trucks is $297,013 and the balance in Accumulated DepreciationTrucks is $102,180. Details of the subsidiary ledger are as follows:

		Estimated		Accumulated Depreciation at	Miles Operated
Truck No.	Cost	Residual Value	Useful Life	Beginning of Year	During Year
1	$80,302	$15,380	249,700 miles		20,300
2	51,225	5,730	303,300 miles	$14,540	32,100
3	79,600	12,940	202,000 miles	62,350	8,100
4	85,886	23,330	240,600 miles	25,290	22,000

	Required:
A.	Determine the depreciation rates per mile and the amount to be credited to the accumulated depreciation section of each of the subsidiary accounts for the miles operated during the current year.
B.	Journalize the entry to record depreciation for the year. Refer to the Chart of Accounts for exact wording of account titles.

A. Determine the depreciation rates per mile and the amount to be credited to the accumulated depreciation section of each of the subsidiary accounts for the miles operated during the current year.

Truck No.	Rate per Mile	Miles Operated	Credit to Accumulated Depreciation
1		20,300
2		32,100
3		8,100
4		22,000
Total

CHART OF ACCOUNTS

General Ledger

	ASSETS
110	Cash
111	Petty Cash
112	Accounts Receivable
114	Interest Receivable
115	Notes Receivable
116	Merchandise Inventory
117	Supplies
119	Prepaid Insurance
120	Land
123	Trucks
124	Accumulated Depreciation-Trucks
125	Equipment
126	Accumulated Depreciation-Equipment
130	Mineral Rights
131	Accumulated Depletion
132	Goodwill
133	Patents

	LIABILITIES
210	Accounts Payable
211	Salaries Payable
213	Sales Tax Payable
214	Interest Payable
215	Notes Payable

	EQUITY
310	Owner, Capital
311	Owner, Drawing
312	Income Summary

	REVENUE
410	Sales
610	Interest Revenue
620	Gain on Sale of Trucks
621	Gain on Sale of Equipment

	EXPENSES
510	Cost of Merchandise Sold
520	Salaries Expense
521	Advertising Expense
522	Depreciation Expense-Trucks
523	Delivery Expense
524	Repairs and Maintenance Expense
529	Selling Expenses
531	Rent Expense
532	Depreciation Expense-Equipment
533	Depletion Expense
534	Amortization Expense-Patents
535	Insurance Expense
536	Supplies Expense
539	Miscellaneous Expense
710	Interest Expense
720	Loss on Sale of Trucks
721	Loss on Sale of Equipment