A company pays $904,400 cash to acquire an iron mine on January 1. At that same time, it incurs additional costs of $71,400 cash to access the mine, which is estimated to hold 119,000 tons of iron. The estimated value of the land after the iron is removed is $23,800. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. 1. Prepare the January 1 entry to record the cost of the iron mine. 2. Prepare the December 31 year-end adjusting entry if 25,700 tons of iron are mined but only 21,800 tons are sold this first year. View transaction list View journal entry worksheet No Date 01 in Mine General Journal Debit 975 800 Credit
A company pays $904,400 cash to acquire an iron mine on January 1. At that same time, it incurs additional costs of $71,400 cash to access the mine, which is estimated to hold 119,000 tons of iron. The estimated value of the land after the iron is removed is $23,800. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. 1. Prepare the January 1 entry to record the cost of the iron mine. 2. Prepare the December 31 year-end adjusting entry if 25,700 tons of iron are mined but only 21,800 tons are sold this first year. View transaction list View journal entry worksheet No Date 01 in Mine General Journal Debit 975 800 Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A company pays $904,400 cash to acquire an iron mine on January 1. At that same time, it incurs additional costs of $71,400 cash to
access the mine, which is estimated to hold 119,000 tons of iron. The estimated value of the land after the iron is removed is $23,800.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
1. Prepare the January 1 entry to record the cost of the iron mine.
2. Prepare the December 31 year-end adjusting entry if 25,700 tons of iron are mined but only 21,800 tons are sold this first year.
View transaction list View journal entry worksheet
V
No
1
2
Date
January 01
December 31
Iron Mine
Cash
General Journal
Depletion expense-Iron Mine
Iron Inventory
Accumulated depletion-Iron Mine
Debit
975,800
Credit
975,800
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