Natural Resources and Depletion Video Lessons

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Problem: Colfax Mining Company acquired a deposit of iron ore at a cost of $2,000,000. Company geologists estimated the deposit contained 1,250,000 tons of iron ore. At the end of the first year, 60,000 tons were extracted. The journal entry to record the total tons extracted during the year would include: a. a debit to Iron Ore Inventory of $96,000. b. a debit to Iron Ore Deposit of $2,000,000. c. a credit to Accumulated Depletion of $96,000. e. both (A) and (C).

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Colfax Mining Company acquired a deposit of iron ore at a cost of $2,000,000. Company geologists estimated the deposit contained 1,250,000 tons of iron ore. At the end of the first year, 60,000 tons were extracted. The journal entry to record the total tons extracted during the year would include:

a. a debit to Iron Ore Inventory of $96,000.

b. a debit to Iron Ore Deposit of $2,000,000.

c. a credit to Accumulated Depletion of $96,000.

e. both (A) and (C).

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