Colorado Mining paid $614,400 to acquire a mine with 820,000 tons of coal reserves. The horizontal statements model reflects Colorado Mining's financial condition just prior to purchasing the coal reserves. The company extracted 430,500 tons of coal in Year 1 and 369,000 tons in Year 2. Required a. Compute the depletion charge per unit. b. Record the acquisition of the coal reserves and the depletion expense for years 1 and 2 in a financial statements model like the preceding one. c. Prepare the general journal entries to record the depletion expense for years 1 and 2.

Colorado Mining paid $614,400 to acquire a mine with 820,000 tons of coal reserves. The horizontal statements model reflects Colorado Mining's financial condition just prior to purchasing the coal reserves. The company extracted 430,500 tons of coal in Year 1 and 369,000 tons in Year 2. Required a. Compute the depletion charge per unit. b. Record the acquisition of the coal reserves and the depletion expense for years 1 and 2 in a financial statements model like the preceding one. c. Prepare the general journal entries to record the depletion expense for years 1 and 2.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter18: Accounting For Long-term Assets

Section: Chapter Questions

Problem 6CE

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