Required information

[The following information applies to the questions displayed below.] On July 23 of the current year, Dakota Mining Company pays $7,814,400 for land estimated to contain 9,768,000 tons of recoverable ore. It installs and pays for machinery costing $1,660,560 on July 25. The company removes and sells 501,500 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. (a) The purchase of the land. (b) The cost and installation of machinery. (c) The first five months' depletion assuming the land has a net salvage value of zero after the ore is mined. (d) The first five months' depreciation on the machinery.

July 23 a) Record the cost of the ore mine of $7,814,400 cash.

July 25 b) Record the cost of the machinery of $1,660,560 cash.

c) Select formula for Units of Production Depletion:

Calculate depletion expense

Depletion per ton:

Tonnage:

Depletion expense:

December 31 c.2) Record the year-end adjusting entry for the depletion expense of ore mine.

d) Select formula for Units of Production Depreciation:

Calculate Depreciation expense

Depreciation per ton:

Tonnage:

Depletion expense:

December d.2) Record the year-end adjusting entry for the depreciation expense of the machinery.