Make the required journal entry for the total amount

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At the beginning of 2020, Crane Company, a small private company, acquired a mine for $3,590,000. Of this amount, $100,000 was allocated to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists found that approximately 21 million units of ore appear to be in the mine. Crane had $225,000 of development costs for this mine before any extraction of minerals. It also determined that the fair value of its obligation to prepare the land for an alternative use when all of the minerals have been removed was $65,000. During 2020, 2.7 million units of ore were extracted and 1.90 million of these units were sold.

Problem a. Calculate the depletion cost per unit for 2020.

Problem b. Make the required journal entry, if any, for the total amount of depletion for 2020.

Problem c. Make the required journal entry, if any, for the total amount that is charged as an expense for 2020 for the cost of minerals sold during 2020.

Reference no: EM132808992

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