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Perez Company acquires an ore mine at a cost of $1,400,000. It incurs additional costs...

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Accounting

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.

Prepare the entry to record the cost of the ore mine and year-end adjusting entry.

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