Computing and Recording Depletion Expense (FSET) During the…
Computing and Recording Depletion Expense (FSET) During the year, Eldenburg Mining Company purchased land for $9,000,000 that had a natural resource reserve estimated to be 625,000 tons. Development and road construction costs on the land were $525,000, and a building was constructed at a cost of $62,500. When the natural resources are completely extracted, the land has an estimated residual value of $1,500,000. In addition, the cost to restore the property to comply with environmental regulations is estimated to be $1,000,000. Production in the first and second year was 75,000 tons and 106,250 tons, respectively. a. Compute the depletion charge for the first and second year. Round answers to nearest whole dollar amount. First year ${#1} Second year ${#2} b. Using the financial statement effects template, report each year’s depletion as determined in part a. If the transaction affects more than one account in a single category, enter the positive amount in the first row. Balance Sheet Income Statement Cash Noncash Contra Contributed Earned Net Asset + Assets – Assets = Liabilities + Capital + Capital Revenues – Expenses = Income First year {#3} {#4} {#5} {#6} {#7} {#8} {#9} {#10} {#11} {#12} {#13} {#14} {#15} {#16} {#17} {#18} {#19} {#20} Second year {#21} {#22} {#23} {#24} {#25} {#26} {#27} {#28} {#29} {#30} {#31} {#32} {#33} {#34} {#35} {#36} {#37} {#38}