Vaughn corporation acquires a coal mine at a cost of $460,000. intangible development costs total $115,000. after extraction has occurred, vaughn must restore the property (estimated fair value of the obligation is $92,000), after which it can be sold for $184,000. vaughn estimates that 4,600 tons of coal can be extracted. if 805 tons are extracted the first year, prepare the journal entry to record depletion. (if no entry is required, select "no entry" for the account titles and enter 0 for the amounts. credit account titles are automatically indented when amount is entered. do not indent manually.)

Depletion expense A/c Dr $84,525

       To Accumulated depletion A/c

(Being the depletion expense for the first year is recorded)

Explanation:

The journal entry is presented below:

Depletion expense A/c Dr $84,525

       To Accumulated depletion A/c

(Being the depletion expense for the first year is recorded)

The computation is shown below

First we have to compute the depletion per ton which is calculated below:

= (Acquired cost of coal mine + Intangible development costs + fair value of the obligation - Sale value) ÷ (Number of estimated tons of coal extracted)

= ($460,000 + $115,000 + $92,000 - $184,000) ÷ (4,600 tons)

= $105

Now if 805 tons are extracted in first year, so the depletion would be

= 805 tons × $105

= $84,525

convection currents in magma drive plate tectonics. the answer is true.