Colorado Mining paid $614,400 to acquire a mine with 820,000 tons of coal reserves. The horizontal statements model reflects Colorado Mining's financial condition just prior to purchasing the coal reserves. The company extracted 430,500 tons of coal in Year 1 and 369,000 tons in Year 2. Required a. Compute the depletion charge per unit. b. Record the acquisition of the coal reserves and the depletion expense for years 1 and 2 in a financial statements model like the preceding one. c. Prepare the general journal entries to record the depletion expense for years 1 and 2.

Colorado Mining paid $614,400 to acquire a mine with 820,000 tons of coal reserves. The horizontal statements model reflects Colorado Mining's financial condition just prior to purchasing the coal reserves. The company extracted 430,500 tons of coal in Year 1 and 369,000 tons in Year 2. Required a. Compute the depletion charge per unit. b. Record the acquisition of the coal reserves and the depletion expense for years 1 and 2 in a financial statements model like the preceding one. c. Prepare the general journal entries to record the depletion expense for years 1 and 2.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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