Colorado Mountain Mining paid $507,700 for the right to extract mineral assets from a 500,000-ton deposit. In addition to the purchase price, Colorado also paid a $600 filing fee, a $1,700 license fee to the state of Nevada, and $90,000 for a geological survey of the property. Because Colorado purchased the rights to the minerals only, it expects the asset to have zero residual value. During the first year, Colorado removed and sold 60,000 tons of the minerals. Make journal entries to record
(a) Purchase of the minerals (debit Minerals),
(b) Payment of fees and other costs,
(c) Depletion for the first year.