Grumpy Coal Miners Inc. owns a coal mine in Northern Ontario. The cost of the mine is $1 Million, and it has a residual value of $200,000. It is estimated that 100 tonnes of coal will be extracted during the life of the mine. In 2019, Grumpy Coal Miners Inc. extracts 17 tonnes of coal. This results in the following adjusting entry: 1. Debit Amortization Expense 100,000, Credit Accumulated Amortization - Coal Mine 100,000 2. Debit Amortization Expense 80,000, Credit Accumulated Amortization - Coal Mine 80,000 3. Debit Inventory 80,000, Credit Accumulated Amortization - Coal Mine 80,000 4. None of the answers are correct 5. Debit Inventory 100,000 Credit Accumulated Amortization - Coal Mine 100,000
Grumpy Coal Miners Inc. owns a coal mine in Northern Ontario. The cost of the mine is $1 Million, and it has a residual value of $200,000. It is estimated that 100 tonnes of coal will be extracted during the life of the mine. In 2019, Grumpy Coal Miners Inc. extracts 17 tonnes of coal. This results in the following adjusting entry: 1. Debit Amortization Expense 100,000, Credit Accumulated Amortization - Coal Mine 100,000 2. Debit Amortization Expense 80,000, Credit Accumulated Amortization - Coal Mine 80,000 3. Debit Inventory 80,000, Credit Accumulated Amortization - Coal Mine 80,000 4. None of the answers are correct 5. Debit Inventory 100,000 Credit Accumulated Amortization - Coal Mine 100,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Grumpy Coal Miners Inc. owns a coal mine in Northern Ontario. The cost of the mine is $1 Million, and it has a residual value of $200,000. It is estimated that 100 tonnes of coal will be extracted during the life of the mine. In 2019, Grumpy Coal Miners Inc. extracts 17 tonnes of coal. This results in the following adjusting entry:
1. Debit Amortization Expense 100,000, Credit Accumulated Amortization - Coal Mine 100,000
2. Debit Amortization Expense 80,000, Credit Accumulated Amortization - Coal Mine 80,000
3. Debit Inventory 80,000, Credit Accumulated Amortization - Coal Mine 80,000
4. None of the answers are correct
5. Debit Inventory 100,000 Credit Accumulated Amortization - Coal Mine 100,000
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