Abbott Industries operates a mineral deposit with an estimated 500,000 tons of available ore.The mineral deposit was purchased for $750,000,and no salvage value is expected.A total of 100,000 tons are mined and sold during the year.Assuming the company uses a contra asset account,how would it record this transaction?
A) Debit Mineral Deposit for $750,000 and credit Cash for $750,000.
B) Debit Depletion Expense-Mineral Deposit for $150,000 and credit Accumulated Depletion-Mineral Deposit for $150,000.
C) Debit Depletion Expense-Mineral Deposit for $150,000 and credit Mineral Deposit for $150,000.
D) Debit Mineral Expense for $150,000 and credit Mineral Deposit for $150,000.
E) Debit Amortization Expense-Mineral Deposit for $150,000 and credit Mineral Deposit for $150,000.
Correct Answer:
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