Business, 13.04.2021 01:00 juliana211

Computing and Recording Depletion Expense In 2019, Eldenburg Mining Company purchased land for $7,200,000 that had a natural resource reserve estimated to be 500,000 tons. Development and road construction costs on the land were $420,000, and a building was constructed at a cost of $50,000. When the natural resources are completely extracted, the land has an estimated residual value of $1,200,000. In addition, the cost to restore the property to comply with environmental regulations is estimated to be $800,000. Production in 2016 and 2017 was 60,000 tons and 85,000 tons, respectively. Required:
a. Compute the depletion charge for 2016 and 2017. (You should include depreciation on the building, if any, as part of the depletion charge.)
b. Prepare a journal entry to record each year's depletion expense as determined in part a.

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Computing and Recording Depletion Expense In 2019, Eldenburg Mining Company purchased land for $7,20...

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