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1. Woodland Company

a) On Feb 1, 2015 The Woodland company purchased land containing an estimated 15 million tonnes of ore at a cost of $5,400,000. The residual value is estimated to be $600,000 and the cost of restoring the land after mining is $1 500 000. The company expects to operate the mine for 10 years. In 2015, the mining company mined and sold 2 million tonnes of ore.

a) Calculate the amount of depletion expense that should be recorded on December 31, 2015.

b) Calculate the amount of the restoration liability to be recorded on December 31, 2015.

c) Show the journal entry for December 31, 2015.