Solare Company acquired mineral rights for $611,000,000 The diamond deposit is estimated at 47,000,000 tons During the current year, 4,930,000 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 to recognize the depletion expense Refer to the Chart of Accounts for exact wording of account titles CHART OF ACCOUNTS Solare Company 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 121 Equipment 122 Accumulated Depreciation 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 Common Stock 311 Retained Earnings 312 Dividends 313 Income Summary REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 520 Salaries Expense 521 Advertising Expense 522 Supplies Expense 523 Delivery Expense 524 Rent Expense 525 Insurance Expense 531 Repairs and Maintenance Expense 541 Depreciation Expense 543 Depletion Expense 544 Amortization Expense Patents 591 Miscellaneous Expense 710 Interest Expense Determine the depletion rate Depletion rate $ per ton Determine the amount of depletion expense for the current year Depletion expense $

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Posted on Aug 24, 2024

Solare Company acquired mineral rights for $611,000,000. The diamond deposit is estimated at 47,000,000 tons. During the current year, 4,930,000 tons were mined and sold.

Solare Company acquired mineral rights for $611,000,000. The diamond deposit is estimated at 47,000,000 tons. During the current year, 4,930,000 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 to recognize the depletion expense. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

Solare Company

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
121	Equipment
122	Accumulated Depreciation
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	Common Stock
311	Retained Earnings
312	Dividends
313	Income Summary

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Merchandise Sold
520	Salaries Expense
521	Advertising Expense
522	Supplies Expense
523	Delivery Expense
524	Rent Expense
525	Insurance Expense
531	Repairs and Maintenance Expense
541	Depreciation Expense
543	Depletion Expense
544	Amortization Expense-Patents
591	Miscellaneous Expense
710	Interest Expense