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Everly Corporation acquires a coal mine at a cost of $870,800. Intangible development costs total $217,700. After extraction has occurred, Everly must restore the property (estimated fair value of the obligation is $174,160), after which it can be sold for $348,320. Everly estimates that 8,708 tons of coal can be extracted.
If 1,524 tons are extracted the first year, prepare the journal entry to record depletion. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Account Titles and Explanation
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