Intra-Spect Mining Co. acquired mineral rights for $153,000,000. The mineral deposit is estimated at 90,000,000 tons. During the current year, 23,400,000 tons were mined and sold. Required:
a. Determine the amount of depletion expense for the current year. Round the depletion rate to two decimals places.
b. Journalize the adjusting entry on December 31 to recognize the depletion expense.

a. Determine the amount of depletion expense for the current year.

$39,780,000

b. Journalize the adjusting entry on December 31 to recognize the depletion expense.

Dr Depletion expense 39,780,000

    Cr Accumulated depletion: Mine 39,780,000

Explanation:

depletion expense per ton mined = $153,000,000 / 90,000,000 = $1.70 per ton

depletion expense for current year = $1.70 x 23,400,000 = $39,780,000

Depletion expense is similar to depreciation expense since the carrying value of the asset decreases as minerals are being mined.

answer; dividing net income by 1- t ;

answerindividual preferences are not revealed in the market for the good;