Ask Question
17 December, 07:16

On July 1, 2019, Friedman Inc. invested $720,000 in a mine estimated to have 900,000 tons of ore of uniform grade. During the last 6 months of 2019, 100,000 tons of ore were mined.

Required:

1) Calculate depletion cost per unit.

2) Prepare the journal to record depletion.

+3
Answers (1)
  1. 17 December, 09:29
    0
    A.$0.8

    B. Dr Depletion account 80,000

    Cr Coal mine Asset 80,000

    Explanation:

    Friedman Inc

    A.

    Depletion cost per unit = Amount invested / Estimated tons of ore

    $720,000/900,000

    =$0.8

    B.

    Journal entry

    Dr Depletion account 80,000

    Cr Coal mine Asset 80,000

    Total depletion of ore = Number of ore * Depletion cost per unit

    =$0.8*100,000

    =80,000
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “On July 1, 2019, Friedman Inc. invested $720,000 in a mine estimated to have 900,000 tons of ore of uniform grade. During the last 6 months ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers