Question

Check my work [The following information applies to the questions displayed below.] On July 23 of the current year, Dakota Mining Co. pays $4,715,000 for land estimated to contain 5,125,000 tons of recoverable ore. It installs and pays for machinery costing $410,000 on July 25 The company removes and sells 480.000 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 (Do not round your intermediate calculations. Round "Depletion per ton" to tw decimal places and round all other answers to the nearest whole dollar.) (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. Complete this question by entering your answers in the tabs below.

Answer 1

Requirement (a) Journal Date Accounts and Explanations Jul-23 Land Cash (To record purchase of land for cash) Credit Debit 47,15,000 $ 47,15,000 Requirement (b) Journal Date Accounts and Explanations Jul-25 Machinery Cash (To record purchase of machinery for cash) Credit Debit 4,10,000 $ $ 4,10,000

Requirement (C) Journal Date Accounts and Explanations Dec-31 Depletion expense (see note 1 below) Accumulated Depletion- Land (To record depletion of land) Credit Debit 4,41,600 $ $ 4,41,600 Note 1 Removal of ores for first 5 months Total ore recoverable Depletion of land (4715000*480000/5125000) 480000 tons 5125000 tons 4,41,600 $ Credit Requirement (d) Journal Date Accounts and Explanations Dec-31 Depreciation expense (see Note 2 below) Accumulated Depreciation- Machinery (To record depreciation of machinery) Debit 38,400 38,400 Removal of ores for first 5 months Total ore recoverable Depreciation of machinery (410000*480000/5125000) 480000 tons 5125000 tons 38,400 $