atural Resources The Hollister Company acquires a silver mine at the cost of $1,300,000 on January 1. Along with the purchase price Hollister pays additional costs associated with development of $50,000. Hollister expects the mine will have a salvage value of $100,000 once all the silver has been mined. Best estimates are that the mine contains 250,000 tons of ore. Required a. Prepare the entry to record the purchase of the silver mine. b. Prepare the December 31 year-end adjusting entry to record depletion is 60,000 tons of ore are mined and all the ore is sold. c. Prepare the December 31 year-end adjusting entry to record depletion is 60,000 tons of ore are mined but only 15,000 tons of the ore are sold. Description Debit Credit a. Answer Answer Answer Answer Answer Answer Purchase of silver mine b. Answer Answer Answer Answer Answer Answer To record depletion on silver mine. c. Silver inventory Answer Answer Answer Answer Answer Answer Answer Answer To record depletion on silver mine.
atural Resources The Hollister Company acquires a silver mine at the cost of $1,300,000 on January 1. Along with the purchase price Hollister pays additional costs associated with development of $50,000. Hollister expects the mine will have a salvage value of $100,000 once all the silver has been mined. Best estimates are that the mine contains 250,000 tons of ore. Required a. Prepare the entry to record the purchase of the silver mine. b. Prepare the December 31 year-end adjusting entry to record depletion is 60,000 tons of ore are mined and all the ore is sold. c. Prepare the December 31 year-end adjusting entry to record depletion is 60,000 tons of ore are mined but only 15,000 tons of the ore are sold. Description Debit Credit a. Answer Answer Answer Answer Answer Answer Purchase of silver mine b. Answer Answer Answer Answer Answer Answer To record depletion on silver mine. c. Silver inventory Answer Answer Answer Answer Answer Answer Answer Answer To record depletion on silver mine.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Natural Resources
The Hollister Company acquires a silver mine at the cost of $1,300,000 on January 1. Along with the purchase price Hollister pays additional costs associated with development of $50,000. Hollister expects the mine will have a salvage value of $100,000 once all the silver has been mined. Best estimates are that the mine contains 250,000 tons of ore.
Required
a. Prepare the entry to record the purchase of the silver mine.
b. Prepare the December 31 year-end
c. Prepare the December 31 year-end adjusting entry to record depletion is 60,000 tons of ore are mined but only 15,000 tons of the ore are sold.
| Description | Debit | Credit | ||
|---|---|---|---|---|
| a. | Answer | Answer | Answer | |
| Answer | Answer | Answer | ||
|
Purchase of silver mine |
||||
| b. | Answer | Answer | Answer | |
| Answer | Answer | Answer | ||
|
To record depletion on silver mine. |
||||
| c. | Silver inventory | Answer | Answer | |
| Answer | Answer | Answer | ||
| Answer | Answer | Answer | ||
|
To record depletion on silver mine. |
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