Answer and Explanation:
a. The computation of the depletion rate is shown below:
= Acquired mineral rights ÷ estimated mineral deposit
= $93,000,000 ÷ 60,000,000 tons
= $1.55 per ton
b. The amount of depletion expense for the current year is
= Depletion rate × current year mined tons
= $1.55 per ton × 16,800,000 tons
= $26,040,000
c. And, the journal entry is
Depletion expense $26,040,000
To Accumulated depletion $26,040,000
(Being depletion expense is recorded)
For recording this entry we debited the depletion expense as it increased the expenses and at the same time it decreased the value of the asset so the accumulated depletion is credited
