xercise letion of Hat A company pays $912,000 cash to acquire an iron mine on January 1. At that same time, it incurs additional costs of $72,000 cash to access the mine, which is estimated to hold 120,000 tons of iron. The estimated value of the land after the iron is removed is $24,000. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1. Prepare the January 1 entry to record the cost of the iron mine. 2. Prepare the December 31 year-end adjusting entry if 26,000 tons of iron are mined but only 22,000 tons are sold the first year. Answer is not complete. No Date General Journal Debit Credit 1 Jan 01 Accumulated depreciation-Iron Mine 984,000 O 984,000 2 Dec 31 Accumulated depletion-Iron Mine 192,000 x 192,000 X
xercise letion of Hat A company pays $912,000 cash to acquire an iron mine on January 1. At that same time, it incurs additional costs of $72,000 cash to access the mine, which is estimated to hold 120,000 tons of iron. The estimated value of the land after the iron is removed is $24,000. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1. Prepare the January 1 entry to record the cost of the iron mine. 2. Prepare the December 31 year-end adjusting entry if 26,000 tons of iron are mined but only 22,000 tons are sold the first year. Answer is not complete. No Date General Journal Debit Credit 1 Jan 01 Accumulated depreciation-Iron Mine 984,000 O 984,000 2 Dec 31 Accumulated depletion-Iron Mine 192,000 x 192,000 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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8 ex 20
Transcribed Image Text:Exercise 8-20 (Algo) Depletion of natural resources LO P3
A company pays $912,000 cash to acquire an iron mine on January 1. At that same time, it incurs additional costs of $72,000 cash to
access the mine, which is estimated to hold 120,000 tons of iron. The estimated value of the land after the iron is removed is $24,000.
(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
1. Prepare the January 1 entry to record the cost of the iron mine.
2. Prepare the December 31 year-end adjusting entry if 26,000 tons of iron are mined but only 22,000 tons are sold the first year.
Answer is not complete.
No
Date
General Journal
Debit
Credit
1
Jan 01
Accumulated depreciation-Iron Mine
984,000 O
984,000
2
Dec 31
Accumulated depletion-Iron Mine
192,000 x
192,000 X
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