Answer and Explanation:
The computation is shown below:
a. For depletion rate
= Acquired mineral rights ÷ estimated mineral deposits
= $81,250,000 ÷ 65,000,000 tons
= $1.25
b. For the amount of depletion expense for the current year is
= Depletion rate × current year mined
= $1.25 × 17,550,000 tons
= $21,937,500
c. The journal entry is shown below:
Depletion Expense $21,937,500
To Accumulated Depletion $21,937,500
(Being the depletion expense is recorded)
For recording this we debited the depletion expense as it increased the expense and credited the accumulated depletion as it reduced the assets
