Salter Mining Company purchased the Northern Tier Mine for $73 million cash. The mine was estimated to contain 6.62 million tons of ore and to have a residual value of $4.6 million.

During the first year of mining operations at the Northern Tier Mine, 70,000 tons of ore were mined, of which 12,000 tons were sold.

a. Prepare a journal entry to record depletion during the year.

b. Show how the Northern Tier Mine, and its accumulated depletion, would appear in Salter Mining Company's balance sheet after the first year of operations.

	No	Transaction	General Journal	Debit	Credit
1	1	1	Inventory
2	1		Accumulated depletion: Northern Tier Mine

Salter Mining Company
Balance Sheet (Partial)
Property, plant, & equipment
Mining property: Northern Tier Mine
Accumulated depletion		$0