Depletion: It refers to the process of proportionately distributing the cost of the extracting natural resources such as coal, mines, and petroleum from the earth to the number of units extracted. The following is the formula to calculate the depletion expense: Depletion Cost per Unit = Cost of the asset − Residual value Estimated Number of Units Depletion Expense = ( Depletion Cost per Unit × Number of units Extracted and Sold ) To record: the journal entry for the purchase of minerals.

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Answer 1

Question

Chapter 9, Problem 9.24E

(a)

To determine

Depletion: It refers to the process of proportionately distributing the cost of the extracting natural resources such as coal, mines, and petroleum from the earth to the number of units extracted. The following is the formula to calculate the depletion expense:

Depletion Cost per Unit = Cost of the asset − Residual valueEstimated Number of Units

Depletion Expense=(Depletion Cost per Unit × Number of units Extracted and Sold)

To record: the journal entry for the purchase of minerals.

(b)

To determine

To record: the journal entry for the payment of fees and other costs.

(c)

To determine

To record: the journal entry for the depletion of the first year.

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Journalizing natural resource depletion Cannon Mountain Mining paid $462,300 for the right to extract mineral assets from a 400,000-ton deposit. In addition to the purchase price, Cannon also paid a $900 filing fee, a $1,800 license fee to the state of Nevada, and $55,000 for a geological survey of the property. Because Cannon purchased the rights to the minerals only and did not purchase the land, it expects the asset to have zero residual value. During the first year, Cannon removed and sold 50,000 tons of minerals. Make journal entries to record (a) purchase of the minerals (debit Minerals), (b) payment of fees and other costs, and (c) depletion for the first year.

Answer 2

Question

Chapter 9, Problem 9.24E

(a)

To determine

Depletion: It refers to the process of proportionately distributing the cost of the extracting natural resources such as coal, mines, and petroleum from the earth to the number of units extracted. The following is the formula to calculate the depletion expense:

Depletion Cost per Unit = Cost of the asset − Residual valueEstimated Number of Units

Depletion Expense=(Depletion Cost per Unit × Number of units Extracted and Sold)

To record: the journal entry for the purchase of minerals.

(b)

To determine

To record: the journal entry for the payment of fees and other costs.

(c)

To determine

To record: the journal entry for the depletion of the first year.

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Answer 3

Question

Chapter 9, Problem 9.24E

(a)

To determine

Depletion: It refers to the process of proportionately distributing the cost of the extracting natural resources such as coal, mines, and petroleum from the earth to the number of units extracted. The following is the formula to calculate the depletion expense:

Depletion Cost per Unit = Cost of the asset − Residual valueEstimated Number of Units

Depletion Expense=(Depletion Cost per Unit × Number of units Extracted and Sold)

To record: the journal entry for the purchase of minerals.

(b)

To determine

To record: the journal entry for the payment of fees and other costs.

(c)

To determine

To record: the journal entry for the depletion of the first year.

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Answer 4

Question

Chapter 9, Problem 9.24E

(a)

To determine

Depletion: It refers to the process of proportionately distributing the cost of the extracting natural resources such as coal, mines, and petroleum from the earth to the number of units extracted. The following is the formula to calculate the depletion expense:

Depletion Cost per Unit = Cost of the asset − Residual valueEstimated Number of Units

Depletion Expense=(Depletion Cost per Unit × Number of units Extracted and Sold)

To record: the journal entry for the purchase of minerals.

(b)

To determine

To record: the journal entry for the payment of fees and other costs.

(c)

To determine

To record: the journal entry for the depletion of the first year.

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Answer 5

Chapter 9, Problem 9.24E

(a)

To determine

Depletion: It refers to the process of proportionately distributing the cost of the extracting natural resources such as coal, mines, and petroleum from the earth to the number of units extracted. The following is the formula to calculate the depletion expense:

Depletion Cost per Unit = Cost of the asset − Residual valueEstimated Number of Units

Depletion Expense=(Depletion Cost per Unit × Number of units Extracted and Sold)

To record: the journal entry for the purchase of minerals.

(b)

To determine

To record: the journal entry for the payment of fees and other costs.

(c)

To determine

To record: the journal entry for the depletion of the first year.

Answer 6

Chapter 9, Problem 9.24E

(a)

To determine

Depletion: It refers to the process of proportionately distributing the cost of the extracting natural resources such as coal, mines, and petroleum from the earth to the number of units extracted. The following is the formula to calculate the depletion expense:

Depletion Cost per Unit = Cost of the asset − Residual valueEstimated Number of Units

Depletion Expense=(Depletion Cost per Unit × Number of units Extracted and Sold)

To record: the journal entry for the purchase of minerals.

Answer 7

Chapter 9, Problem 9.24E

(a)

To determine

Depletion: It refers to the process of proportionately distributing the cost of the extracting natural resources such as coal, mines, and petroleum from the earth to the number of units extracted. The following is the formula to calculate the depletion expense:

Depletion Cost per Unit = Cost of the asset − Residual valueEstimated Number of Units

Depletion Expense=(Depletion Cost per Unit × Number of units Extracted and Sold)

To record: the journal entry for the purchase of minerals.

Answer 8

(b)

To determine

To record: the journal entry for the payment of fees and other costs.

Answer 9

(b)

To determine

To record: the journal entry for the payment of fees and other costs.

Answer 10

(c)

To determine

To record: the journal entry for the depletion of the first year.

Answer 11

(c)

To determine

To record: the journal entry for the depletion of the first year.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 9 - Prob. 1QC Ch. 9 - Prob. 2QC Ch. 9 - Which method almost always produces the most...Ch. 9 - A Celty Airline jet costs 28,000,000 and is...Ch. 9 - A copy machine costs 45,000 when new and has...Ch. 9 - Suppose Print and Photo Center in the preceding...Ch. 9 - Prob. 7QC Ch. 9 - Prob. 8QC Ch. 9 - Liberty Corporation reported beginning and ending...Ch. 9 - A truck costs 50,000 when new and has accumulated...

Solution Summary: The author explains the accounting equation to record the journal entry for the purchase of minerals.

To record: the journal entry for the payment of fees and other costs.

To record: the journal entry for the depletion of the first year.

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Chapter 9 Solutions