On January 1, 2015, the Jones-Smith Corp. acquired a parcel of land for $6,000,000 from which it expects to extract
300,000 tons of coal over the next ten years. Afterwards, the land will be reclaimed at an estimated cost of $650,000 and sold for an estimated $350,000. In 2016, a building was constructed on the mine site at a cost of $680,000. It is estimated that the building will have zero residual value when mining is completed.
During 2015, 15,000 tons of ore were mined, and in 2016, 19,000 tons of ore were mined. At the beginning of 2016, the estimated amount of ore remaining was revised to 250,000 tons.
Required:
a. Prepare the depletion entry for 2015.
b. Determine the total amount of inventoriable costs to be recorded in 2016.

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The Answer of On January 1, 2015, the Jones-Smith Corp. acquired a parcel of land for $6,000,000 from which it expects to extract
300,000 tons of coal over the next ten years. Afterwards, the land will be reclaimed at an estimated cost of $650,000 and sold for an estimated $350,000. In 2016, a building was constructed on the mine site at a cost of $680,000. It is estimated that the building will have zero residual value when mining is completed.
During 2015, 15,000 tons of ore were mined, and in 2016, 19,000 tons of ore were mined. At the beginning of 2016, the estimated amount of ore remaining was revised to 250,000 tons.
Required:
a. Prepare the depletion entry for 2015.
b. Determine the total amount of inventoriable costs to be recorded in 2016.