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Down Deep Mining Co. acquired mineral rights for $42,000,000. The mineral deposit is estimated at 30,000,000 tons. During the current year, 6,900,000 tons were mined and sold.
Problem a. Determine the depletion rate. If required, round your answer to two decimal places.
Problem b. Determine the amount of depletion expense for the current year.
Problem c. Journalize the adjusting entry on December 31 to recognize the depletion expense. If an amount box does not require an entry, leave it blank.
Financial Statement Analysis and Preparation
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