Sunset Mountain Mining paid $362,300 for the right to extract mineral assets from a 350,000-ton deposit. In addition to the purchase price, Sunset also paid a $300 filing fee, a $2,400 license fee to the state of Nevada, and $55,000 for a geological survey of the property. Because Sunset purchased the rights to the minerals only and did not purchase the land, it expects the asset to have zero residual value. During the first year, Sunset removed and sold 40,000 tons of the minerals. Make journal entries to record (a) purchase of the minerals (debit Minerals), (b) payment of fees and other costs, and (c) depletion for the first year. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
Mountain Mining paid
for the right to extract mineral assets from a
deposit. In addition to the purchase price,
also paid a
filing fee, a
license fee to the state of Nevada, and
for a geological survey of the property. Because
purchased the rights to the minerals only and did not purchase the land, it expects the asset to have zero residual value. During the first year,
removed and sold
tons of the minerals. Make journal entries to record (a) purchase of the minerals (debit Minerals), (b) payment of fees and other costs, and (c) depletion for the first year. (Record debits first, then credits. Select the explanation on the last line of the
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