80.2K

Verified Solution

Link Copied!

image

Colorado Mining paid $600,000 to acquire a mine with 40,000 tons of coal reserves. The horizontal statements model reflects Colorado Mining's financial condition just prior to purchasing the coal reserves. The company extracted 15,000 tons of coal in Year 1 and 18,000 tons in Year 2. Required a. Compute the depletion charge per unit. b. Record the acquisition of the coal reserves and the depletion expense for years 1 and 2 in a financial statements model like the preceding one. c. Prepare the general journal entries to record the depletion expense for years 1 and 2. Complete this question by entering your answers in the tabs below. Record the acquisition of the coal reserves and the depletion expense for years 1 and 2 in a horizontal statements model. (In the Statement of Cash Flows column, use th designate operating activity, IA for investing activity, and FA for financing activity. Leave blank to indicate that an element is not affected by the event. Enter any decreas balances and cash outflows with a minus sign.) $$\text{Unknown environment 'tabular'}$$ & & & & $$\text{Unknown environment 'tabular'}$$ & + & $$\text{Unknown environment 'tabular'}$$ & & & & & & \ \hline 800,000 & + & & = & & + & 800,000 & + & & & - & & = & & \ \hline & + & & = & & + & & + & & & - & & = & & \ \hline \multicolumn{15}{|c|}{ Depletion for Year 1} \ \hline & + & 600,000 & = & & + & & + & & & - & 225,000 & = & & \ \hline \multicolumn{15}{|c|}{ Depletion for Year 2} \ \hline & + & & = & & + & & + & & & - & 270,000 & = & & \ \hline \end{tabular}

Answer & Explanation Solved by verified expert

See Answer