Tyler Industries operates a mineral deposit with an estimated 1,500,000 tons of available ore.The mineral deposit was purchased for $1,500,000,and no salvage value is expected.A total of 200,000 tons are mined,but only 100,000 tons were sold during the year.How would the company record this transaction?
A)Debit Depletion Expense-Mineral Deposit for $100,000,debit Ore Inventory for $100,000,and credit Accumulated Depletion-Mineral Deposit for $200,000.
B)Debit Depletion Expense-Mineral Deposit for $200,000 and credit Accumulated Depletion-Mineral Deposit for $200,000.
C)Debit Depletion Expense-Mineral Deposit for $100,000 and credit Accumulated Depletion-Mineral Deposit for $100,000.
D)Debit Mineral Expense for $200,000 and credit Mineral Deposit for $200,000.
E)Debit Amortization Expense-Mineral Deposit for $200,000,credit Ore Deposit for $100,000 and credit Accumulated Depletion-Mineral Deposit for $100,000.

Question

Quizplus · Accepted Answer

The depletion cost per ton is $1 ($1,500,000/1,500,000 tons). For 200,000 tons mined, the depletion is $200,000. The cost of 100,000 tons sold is expensed, and the remaining 100,000 tons are recorded as inventory.

Tyler Industries Operates a Mineral Deposit with an Estimated 1,500,000