In 2012, Maharaja Mining purchased a tract of land for $1,200,000 containing palladium ore with the purpose of extracting this valuable metal. The company spent an additional $211,000 on Norman Geological Services to help determine the amount of mineral estimated to be on this tract of land. The survey results revealed there to be an estimated 1 million tons of palladium ore after which Maharaja can sell the land for $38,000. Additional costs that the company incurred to develop this site for mining such as building roads, establishing power lines, etc are $126,050.
Maharaja extracted 269,445 tons of Palladium ore in 2012 and 217,595 tons of iron ore in 2013.
a) Calculate the depletion cost per ton of Palladium. Â Round to the nearest penny, and use the rounded value in the remainder of the problem.
$ per ton
b) Calculate the Depletion cost in 2012 and journalize it
| Date | Description | Debit | Credit |
|---|---|---|---|
| 2012 | |||
| 2012 |
c) Calculate the Depletion cost in 2013 and journalize it
| Date | Description | Debit | Credit |
|---|---|---|---|
| 2013 | |||
| 2013 |