Prepare the depletion entry for 2006

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Question description

January 1, 2006, Company acquired a parcel of land for 4,000,000, from which they expect to extract 250,000 tons of ore over the next 10 years. Afterwards, the land will be reclaimed at an estimated cost of 500,000 and sold for estimated 250,000. In 2007 building was constructed on the mine site for 580,000 with an estimated zero value when mining is completed. During 2006, 15 000 tons were mined and in 2005 19,000tons. Also at the beginning of 2007 the amount of ore remaining was estimated at 200,000 tons.

Prepare the depletion entry for 2006

and determine the total amount of inventoriable costs to be recorded in 2007

Depletion; depreciation; total

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(Top Tutor) Daniel C.
School: UCLA
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