Chasteen Company Acquired Mineral Rights for $9,100,000

question 112

Essay

Chasteen Company acquired mineral rights for $9,100,000.The mineral deposit is estimated at 65,000,000 tons.During the current year,18,375,000 tons were mined and sold.
Required:
1 Determine the amount of depletion expense for the current year.
2 Journalize the adjusting entry to recognize the depletion expense.

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Definitions:

Drawee

The party upon whom a cheque or draft is drawn, and who is expected to pay the amount specified to the payee.

Payee

The individual or entity to whom a cheque or electronic payment is made payable.

Negotiability

The characteristic of a document, typically a financial instrument, that allows it to be transferred or assigned from one party to another as a form of payment or investment.

Japanese Yen

The official currency of Japan, represented by the symbol ¥.