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babymother [125]
3 years ago
12

Crane Corporation acquires a coal mine at a cost of $476,000. Intangible development costs total $119,000. After extraction has

occurred, Crane must restore the property (estimated fair value of the obligation is $95,200), after which it can be sold for $190,400. Crane estimates that 4,760 tons of coal can be extracted. If 833 tons are extracted the first year, prepare the journal entry to record depletion. (I
Business
1 answer:
Alika [10]3 years ago
7 0

Answer:

Dr Depletion expense 87,465

    Cr Accumulated depletion, coal mine 87,465

Explanation:

total depreciable costs = $476,000 + $119,000 + $95,200 - $190,400 = $499,800

depletion rate = $499,800 / 4,760 tons of coal = $105 per ton of coal

depletion expense during year 1 = $105 per ton x 833 tons = $87,465

Depletion expense is similar to depreciation expense, and is primarily used by extracting companies, e.g. mines, oil companies. Accumulated depletion decreases the book value of the asset.

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<h2>What is corporate partner?</h2>

A corporate partnership means a beneficial relationship between two separate company for specific purpose.

Here, the car company and sheet metal supplier are corporate partners because they have a specific purpose they serve there selves.

In conclusion, the car company would be called a <u>supplier's corporate partner</u> if its collaborated with a sheet metal supplier.

Read more about corporate partnership

<em>brainly.com/question/14034519</em>

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