Perez Company acquires an ore mine at a cost of $1,400,000. It incurs additional costs of $400,000 to access the mine, which is estimated to hold 1,000,000 tons of ore. 180,000 tons of ore are mined and sold the first year. The estimated value of the land after the ore is removed is $200,000. Calculate the depletion expense from the information given. (Do not round your intermediate calculations.)
Cost
Salvage
Amount subject to depletion
Total units of capacity
Depletion per unit (#.##)
Units extracted and sold in period
Depletion expense
1. Prepare the entry to record the cost of the ore mine.
2. Prepare the year-end adjusting entry.
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