question 8\n5 points\nsands company purchased mining rights for $500,000. it expects to harvest 1 million…

question 8\n5 points\nsands company purchased mining rights for $500,000. it expects to harvest 1 million tons of ore over the next 5\nyears. during the current year, sands mined 350,000 tons of ore. the entry to journalize the depletion would include\na\na debit to depletion expense for $175,000\nb credit to depletion expense for $350,000\nc debit to accumulated depletion for $175,000\nd credit to accumulated depletion for $350,000\ncontinue

question 8\n5 points\nsands company purchased mining rights for $500,000. it expects to harvest 1 million tons of ore over the next 5\nyears. during the current year, sands mined 350,000 tons of ore. the entry to journalize the depletion would include\na\na debit to depletion expense for $175,000\nb credit to depletion expense for $350,000\nc debit to accumulated depletion for $175,000\nd credit to accumulated depletion for $350,000\ncontinue

Answer

Explanation:

Step1: Calculate depletion per ton

Depletion per ton = Cost of mining rights / Total expected tons Depletion per ton = $\frac{500000}{1000000}= 0.5$ dollars per ton

Step2: Calculate depletion expense for current year

Depletion expense = Depletion per ton × Tons mined in current year Depletion expense = $0.5\times350000 = 175000$ dollars

When recording depletion, we debit Depletion Expense (an expense account which increases with a debit) and credit Accumulated Depletion (a contra - asset account which increases with a credit).

Answer:

A. debit to Depletion Expense for $175,000