Novak Corporation acquires a coal mine at a cost of $ 831,000. Intangible development costs total $ 216,000. After extraction has occurred, Novak must restore the property (estimated fair value of the obligation is $ 91,000), after which it can be sold for $ 118,000. Novak estimates that 8,500 tons of coal can be extracted. If 600 tons are extracted the first year, prepare the journal entry to record depletion. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit
Novak Corporation acquires a coal mine at a cost of $ 831,000. Intangible development costs total $ 216,000. After extraction has occurred, Novak must restore the property (estimated fair value of the obligation is $ 91,000), after which it can be sold for $ 118,000. Novak estimates that 8,500 tons of coal can be extracted. If 600 tons are extracted the first year, prepare the journal entry to record depletion. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit
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 7E: Loban Company purchased four cars for 9,000 each and expects that they will be sold in 3 years for...
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