estonCo is a nickel mining company in North WestOntario. It has incurred the following costs re quisition and the right to use an additional 1,500 hectares of land: asing costs: $775,000 ploration and evaluation costs: velopment costs incurred to open the mine: $43,000,000 ese costs have been capitalized and Weston Co estimates that the mine will produce 6,500 ton tructions $1,348,000
estonCo is a nickel mining company in North WestOntario. It has incurred the following costs re quisition and the right to use an additional 1,500 hectares of land: asing costs: $775,000 ploration and evaluation costs: velopment costs incurred to open the mine: $43,000,000 ese costs have been capitalized and Weston Co estimates that the mine will produce 6,500 ton tructions $1,348,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:WestonCo is a nickel mining company in North WestOntario. It has incurred the following costs related to the
acquisition and the right to use an additional 1,500 hectares of land:
Leasing costs:
$775,000
Exploration and evaluation costs:
Development costs incurred to open the mine:
$43,000,000
These costs have been capitalized and WestonCo estimates that the mine will produce 6,500 tonnes of ore.
Instructions
a) Journalize any necessary entries to record depletion for year one assuming that 30% of the mine's nickel is extracted.
b) Prepare a partial balance sheet at the end of year one to reflect how the mine will be presented in the financial
statements.
$1,348,000
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