Reference no: EM132779713

Sunset Mountain Mining paid $362,300 for the right to extract mineral assets from a 350,000?-ton deposit. In addition to the purchase? price, Sunset also paid a $300 filing? fee, a $2,400 license fee to the state of? Nevada, and $55,000 for a geological survey of the property. Because Sunset purchased the rights to the minerals only and did not purchase the? land, it expects the asset to have zero residual value. During the first? year, Sunset removed and sold 40,000 tons of the minerals.

Problem 1: Make journal entries to record? (a) purchase of the minerals? (debit Minerals),? (b) payment of fees and other? costs, and? (c) depletion for the first year. ?(Record debits? first, then credits. Select the explanation on the last line of the journal entry? table.)

Problem 2: Begin by journalizing? (a) the purchase of the minerals? (debit Mineral? asset). ?(Do not record payment for any additional costs associated with the minerals.