Depletion Entries Alaska Mining Co. acquired mineral rights for $20,864,000. The mineral deposit is estimated at 130,400,000 tons. During the current year, 19,550,000 tons were mined and sold. a. Determine the amount of depletion expense for the current year. Round the depletion rate to two decimals places. $ b. Journalize the adjusting entry on December 31 to recognize the depletion expense. accumulated depletion cash depletion expense depletion payable mineral rights repairs and mantenance expense 2. Willow Creek Company purchased and installed carpet in its new general offices on April 30 for a total cost of $35,904. The carpet is estimated to have a 17-year useful life and no residual value. A. Prepare the journal entry necessary for recording the purchase of the new carpet. Refer to the Chart of Accounts for exact wording of account titles. B. Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that Willow Creek Company uses the straight-line method. Refer to the Chart of Accounts for exact wording of account titles. CHART OF ACCOUNTS Willow Creek Company General Ledger ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 114 Interest Receivable 115 Notes Receivable 116 Merchandise Inventory 117 Supplies 119 Prepaid Insurance 120 Land 123 Carpet 124 Accumulated Depreciation-Carpet 125 Equipment 126 Accumulated Depreciation-Equipment 130 Mineral Rights 131 Accumulated Depletion 132 Goodwill 133 Patents LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Owner's Capital 311 Owner's Drawing REVENUE 410 Sales 610 Interest Revenue 620 Gain on Sale of Carpet 621 Gain on Sale of Equipment EXPENSES 510 Cost of Merchandise Sold 520 Salaries Expense 521 Advertising Expense 522 Depreciation Expense-Carpet 523 Delivery Expense 524 Repairs and Maintenance Expense 529 Selling Expenses 531 Rent Expense 532 Depreciation Expense-Equipment 533 Depletion Expense 534 Amortization Expense-Patents 535 Insurance Expense 536 Supplies Expense 539 Miscellaneous Expense 710 Interest Expense 720 Loss on Sale of Carpet 721 Loss on Sale of Equipment A. Prepare the journal entry necessary for recording the purchase of the new carpet. Refer to the Chart of Accounts for exact wording of account titles. PAGE 1 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 B. Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that Willow Creek Company uses the straight-line method. Refer to the Chart of Accounts for exact wording of account titles. PAGE 2 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Adjusting Entries 2 3

Depletion Entries Alaska Mining Co. acquired mineral rights for $20,864,000. The mineral deposit is estimated at 130,400,000 tons. During the current year, 19,550,000 tons were mined and sold. a. Determine the amount of depletion expense for the current year. Round the depletion rate to two decimals places. $ b. Journalize the adjusting entry on December 31 to recognize the depletion expense. accumulated depletion cash depletion expense depletion payable mineral rights repairs and mantenance expense 2. Willow Creek Company purchased and installed carpet in its new general offices on April 30 for a total cost of $35,904. The carpet is estimated to have a 17-year useful life and no residual value. A. Prepare the journal entry necessary for recording the purchase of the new carpet. Refer to the Chart of Accounts for exact wording of account titles. B. Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that Willow Creek Company uses the straight-line method. Refer to the Chart of Accounts for exact wording of account titles. CHART OF ACCOUNTS Willow Creek Company General Ledger ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 114 Interest Receivable 115 Notes Receivable 116 Merchandise Inventory 117 Supplies 119 Prepaid Insurance 120 Land 123 Carpet 124 Accumulated Depreciation-Carpet 125 Equipment 126 Accumulated Depreciation-Equipment 130 Mineral Rights 131 Accumulated Depletion 132 Goodwill 133 Patents LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Owner's Capital 311 Owner's Drawing REVENUE 410 Sales 610 Interest Revenue 620 Gain on Sale of Carpet 621 Gain on Sale of Equipment EXPENSES 510 Cost of Merchandise Sold 520 Salaries Expense 521 Advertising Expense 522 Depreciation Expense-Carpet 523 Delivery Expense 524 Repairs and Maintenance Expense 529 Selling Expenses 531 Rent Expense 532 Depreciation Expense-Equipment 533 Depletion Expense 534 Amortization Expense-Patents 535 Insurance Expense 536 Supplies Expense 539 Miscellaneous Expense 710 Interest Expense 720 Loss on Sale of Carpet 721 Loss on Sale of Equipment A. Prepare the journal entry necessary for recording the purchase of the new carpet. Refer to the Chart of Accounts for exact wording of account titles. PAGE 1 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 B. Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that Willow Creek Company uses the straight-line method. Refer to the Chart of Accounts for exact wording of account titles. PAGE 2 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Adjusting Entries 2 3

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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Depletion Entries

Alaska Mining Co. acquired mineral rights for $20,864,000. The mineral deposit is estimated at 130,400,000 tons. During the current year, 19,550,000 tons were mined and sold.

a. Determine the amount of depletion expense for the current year. Round the depletion rate to two decimals places.
$

b. Journalize the adjusting entry on December 31 to recognize the depletion expense.

accumulated depletion

cash

depletion expense

depletion payable

mineral rights

repairs and mantenance expense

Willow Creek Company purchased and installed carpet in its new general offices on April 30 for a total cost of $35,904. The carpet is estimated to have a 17-year useful life and no residual value.

A.	Prepare the journal entry necessary for recording the purchase of the new carpet. Refer to the Chart of Accounts for exact wording of account titles.
B.	Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that Willow Creek Company uses the straight-line method. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

Willow Creek Company

General Ledger

	ASSETS
110	Cash
111	Petty Cash
112	Accounts Receivable
114	Interest Receivable
115	Notes Receivable
116	Merchandise Inventory
117	Supplies
119	Prepaid Insurance
120	Land
123	Carpet
124	Accumulated Depreciation-Carpet
125	Equipment
126	Accumulated Depreciation-Equipment
130	Mineral Rights
131	Accumulated Depletion
132	Goodwill
133	Patents

	LIABILITIES
210	Accounts Payable
211	Salaries Payable
213	Sales Tax Payable
214	Interest Payable
215	Notes Payable

	EQUITY
310	Owner's Capital
311	Owner's Drawing

	REVENUE
410	Sales
610	Interest Revenue
620	Gain on Sale of Carpet
621	Gain on Sale of Equipment

	EXPENSES
510	Cost of Merchandise Sold
520	Salaries Expense
521	Advertising Expense
522	Depreciation Expense-Carpet
523	Delivery Expense
524	Repairs and Maintenance Expense
529	Selling Expenses
531	Rent Expense
532	Depreciation Expense-Equipment
533	Depletion Expense
534	Amortization Expense-Patents
535	Insurance Expense
536	Supplies Expense
539	Miscellaneous Expense
710	Interest Expense
720	Loss on Sale of Carpet
721	Loss on Sale of Equipment

A. Prepare the journal entry necessary for recording the purchase of the new carpet. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2

B. Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that Willow Creek Company uses the straight-line method. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 2

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1		Adjusting Entries
2
3

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