Answer:
a. 3,787,800.00
b. Debit Amortization expense $3,787,800.00
Credits Mining rights (B/S) $3,787,800.00
Being entries to recognize depletion expense for the period.
Explanation:
The depletion expense represents the dollar equivalent of the mineral right that has been mined during a given period of time.
Therefore, given;
Deposits = 21,400,000 tons
Quantity mined during the period = 2,150,000 tons
Cost of rights acquisition = $37,878,000
Depletion expense = (2,150,000 tons/21,400,000 tons) × $37,878,000
= $3,787,800.00 (with the depletion rate rounded to two decimals places)
Debit Amortization expense $3,787,800.00
Credits Mining rights (B/S) $3,787,800.00
Being entries to recognize depletion expense for the period.
