(Learning Objective 5: Record natural resource assets and depletion) MineralMines paid $425,000 for the right to extract ore from a 250,000-ton mineral deposit. In additionto the purchase price, Mineral Mines paid a $110 filing fee to the country recorder, a $2,000license fee to the state of Colorado, and $55,390 for a geologic survey. Because the companypurchased the rights to the minerals only, it expects this mineral rights asset to have a residualvalue of zero when it is fully depleted. During the first year of production, Mineral Minesremoved 35,000 tons of ore, of which it sold 29,000 tons. Make journal entries to record (a)purchase of the mineral rights, (b) payment of fees and other costs, (c) depletion for first-yearproduction, and (d) cost of the ore sold. Round depletion per unit to the closest cent

Question

(Learning Objective 5: Record natural resource assets and depletion) Mineral
Mines paid $425,000 for the right to extract ore from a 250,000-ton mineral deposit. In addition
to the purchase price, Mineral Mines paid a $110 filing fee to the country recorder, a $2,000
license fee to the state of Colorado, and $55,390 for a geologic survey. Because the company
purchased the rights to the minerals only, it expects this mineral rights asset to have a residual
value of zero when it is fully depleted. During the first year of production, Mineral Mines
removed 35,000 tons of ore, of which it sold 29,000 tons. Make journal entries to record (a)
purchase of the mineral rights, (b) payment of fees and other costs, (c) depletion for first-year
production, and (d) cost of the ore sold. Round depletion per unit to the closest cent

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