Q:On April 2, 2009, Mitzu Mining Co. pays $4,853,110 for an ore deposit containing 1,569,000 tons. The company installs machinery in the mine costing $245,100, with an estimated seven-year life and no salvage value. The machinery will be abandoned when the ore is completely mined. Mitzu began mining on May 1, 2009, and mined and sold 184,500 tons of ore during the remaining eight months of 2009. Prepare the December 31, 2009, entries to record both the ore deposit depletion and the mining machinery depreciation. Mining machinery depreciation should be in proportion to the mine's depletion.

Dr Depletion expense $570,681 (184,500/1,569,000 x $4,853,110) Cr Accumulated depletion $570,680 Dr Depreciation expense $28,822 (184,500/1,569,000 x $245,100) Cr Accumulated depreciation $28,822

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