Kryan Corp

question 50

Essay

Kryan Corp. mines and produces aluminum. During 2012, the company explored two new sites and evaluated them for aluminum ore potential. By the December 31, 2012 year-end, both sites remained in the evaluation stage. During 2013, evaluation of site Atlanta was completed and the site was deemed to have sufficient quantities of ore; consequently, development of the site began. However, site Blenty was determined to have ore concentrations too low to be commercially viable. The following is the cost of exploration and evaluation incurred on the two sites:
Required:
Record the journal entries in 2012 and 2013 relating to the exploration and evaluation costs using the full cost method.

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Definitions:

Duty Of Loyalty

A legal obligation of individuals in fiduciary roles to act in the best interest of the party they owe the duty to, typically seen in corporate governance and employment.

Paid Agent

An individual or entity that is compensated to act on behalf of another person or company, typically in a representative or intermediary role.

Independent Contractors

Individuals who provide goods or services under terms specified in a contract or within a verbal agreement, not considered employees.

Agents

Individuals or entities authorized to act on behalf of another person or entity in business transactions or legal matters.