Make journal entries to record purchase of the minerals

Reference no: EM131819864

Question: Journalizing natural resource depletion Sierra Mountain Mining paid $577,200 for the right to extract mineral assets from a 350,000-ton deposit. In addition to the purchase price, Sierra also paid a $600 filing fee, a $2,200 license fee to the state of Nevada, and $85,000 for a geological survey of the property. Because Sierra purchased the rights to the minerals only, it expects the asset to have a zero residual value. During the first year, Sierra removed and sold 30,000 tons of the minerals. Make journal entries to record

(a) purchase of the minerals (debit Minerals),

(b) payment of fees and other costs, and

Reference no: EM131819864

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