Colorado Mining paid $600,000 to acquire a mine with 40,000 tons of coal reserves. The following statements model reflects Colorado Mining€™s financial condition just prior to purchasing the coal reserves. The company extracted 15,000 tons of coal in year 1 and 18,000 tons in year 2.

Required
a. Compute the depletion charge per unit.
b. Record the acquisition of the coal reserves and the depletion expense for years 1 and 2 in a financial statements model like the preceding one.
c. Prepare the general journal entries to record the depletion expense for years 1 and 2. Exercise

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Assets Equity Rev.- Exp. Net Inc Cash Flow Cash Coal Res.Com. Stk. Ret. Earn. 800,000 NA 800,000 NA NA NA NA NA =