Abbott Industries Operates a Mineral Deposit with an Estimated 500,000

question 12

Multiple Choice

Abbott Industries operates a mineral deposit with an estimated 500,000 tons of available ore.The mineral deposit was purchased for $750,000,and no salvage value is expected.A total of 100,000 tons are mined and sold during the year.Assuming the company uses a contra asset account,how would it record this transaction?

• A)Debit Mineral Deposit for $750,000 and credit Cash for $750,000.
• B)Debit Depletion Expense-Mineral Deposit for $150,000 and credit Accumulated Depletion-Mineral Deposit for $150,000.
• C)Debit Depletion Expense-Mineral Deposit for $150,000 and credit Mineral Deposit for $150,000.
• D)Debit Mineral Expense for $150,000 and credit Mineral Deposit for $150,000.
• E)Debit Amortization Expense-Mineral Deposit for $150,000 and credit Mineral Deposit for $150,000.

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