Chapter 8, Problem 20E

1.

To determine

Concept Introduction:

Wasting assets: The assets that are physically consumed when used and are generally natural resources like oil and gas fields, mineral deposits, and standing timber are referred to as wasting assets. These assets are extracted and used as part of raw material to be converted into products, until that conversion takes place, these are regarded as noncurrent assets.

The entry on January 1 to record the cost of the iron mine.

2.

To determine

Concept Introduction:

Wasting assets: The assets that are physically consumed when used and are generally natural resources like oil and gas fields, mineral deposits, and standing timber are referred to as wasting assets. These assets are extracted and used as part of raw material to be converted into products, until that conversion takes place, these are regarded as noncurrent assets.

The adjustment entries for 20,000 units are mined but 18,000 tons are sold in this first year.