Sands Company purchased mining rights for $500,000. They expect to harvest 1 million tons of ore over the next five years. During the current year, Sands mined 350,000 tons of ore. The entry to record the depletion would include

Question

Business

Miranda Rosales

15 June, 00:46

Sands Company purchased mining rights for $500,000. They expect to harvest 1 million tons of ore over the next five years. During the current year, Sands mined 350,000 tons of ore. The entry to record the depletion would include

+1

Answers (1)

Know the Answer?

Magdalena Page · Answer 1

I believe they would have an entry showing 35 % depletion for the current year ie 350,000/1000,000 tons. Also, they could most likely retire $175,000 of the mining rights cost or 35% of 500,000 presuming the net revenue was greater than the $175,000.