Reference no: EM132592141
Chasteen Company acquired mineral rights for $9,100,000. The mineral deposit is estimated at 65,000,000 tons. During the current year, 18,375,000 tons were mined and sold.
Required:
Question (1) Determine the amount of depletion expense for the current year.
Question (2) Journalize the adjusting entry to recognize the depletion expense. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS
Chasteen Company
General Ledger
ASSETS
110 Cash
111 Petty Cash
112 Accounts Receivable
114 Interest Receivable
115 Notes Receivable
116 Merchandise Inventory
117 Supplies
119 Prepaid Insurance
120 Land
121 Equipment
122 Accumulated Depreciation
130 Mineral Rights
131 Accumulated Depletion
132 Goodwill
133 Patents
LIABILITIES
210 Accounts Payable
211 Salaries Payable
213 Sales Tax Payable
214 Interest Payable
215 Notes Payable
EQUITY
310 Common Stock
311 Retained Earnings
312 Dividends
313 Income Summary
REVENUE
410 Sales
610 Interest Revenue
EXPENSES
510 Cost of Merchandise Sold
520 Salaries Expense
521 Advertising Expense
522 Supplies Expense
523 Delivery Expense
524 Rent Expense
525 Insurance Expense
531 Repairs and Maintenance Expense
541 Depreciation Expense
543 Depletion Expense
544 Amortization Expense-Patents
591 Miscellaneous Expense
710 Interest Expense