Grumpy Coal Miners Inc. owns a coal mine in Northern Ontario. The cost of the mine is $1 Million, and it has a residual value of $200,000. It is estimated that 100 tonnes of coal will be extracted during the life of the mine. In 2019, Grumpy Coal Miners Inc. extracts 17 tonnes of coal. This results in the following adjusting entry: 1. Debit Amortization Expense 100,000, Credit Accumulated Amortization - Coal Mine 100,000 2. Debit Amortization Expense 80,000, Credit Accumulated Amortization - Coal Mine 80,000 3. Debit Inventory 80,000, Credit Accumulated Amortization - Coal Mine 80,000 4. None of the answers are correct 5. Debit Inventory 100,000 Credit Accumulated Amortization - Coal Mine 100,000
Grumpy Coal Miners Inc. owns a coal mine in Northern Ontario. The cost of the mine is $1 Million, and it has a residual value of $200,000. It is estimated that 100 tonnes of coal will be extracted during the life of the mine. In 2019, Grumpy Coal Miners Inc. extracts 17 tonnes of coal. This results in the following adjusting entry: 1. Debit Amortization Expense 100,000, Credit Accumulated Amortization - Coal Mine 100,000 2. Debit Amortization Expense 80,000, Credit Accumulated Amortization - Coal Mine 80,000 3. Debit Inventory 80,000, Credit Accumulated Amortization - Coal Mine 80,000 4. None of the answers are correct 5. Debit Inventory 100,000 Credit Accumulated Amortization - Coal Mine 100,000
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 13P
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(Multiple Choice Question)
Grumpy Coal Miners Inc. owns a coal mine in Northern Ontario. The cost of the mine is $1 Million, and it has a residual value of $200,000. It is estimated that 100 tonnes of coal will be extracted during the life of the mine. In 2019, Grumpy Coal Miners Inc. extracts 17 tonnes of coal. This results in the following adjusting entry:
1. Debit Amortization Expense 100,000, Credit Accumulated Amortization - Coal Mine 100,000
2. Debit Amortization Expense 80,000, Credit Accumulated Amortization - Coal Mine 80,000
3. Debit Inventory 80,000, Credit Accumulated Amortization - Coal Mine 80,000
4. None of the answers are correct
5. Debit Inventory 100,000 Credit Accumulated Amortization - Coal Mine 100,000
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