Ecru Sand and Gravel paid $600,000 to acquire 800,000 cubic yards of sand reserves. The following statements

Question:

Ecru Sand and Gravel paid $600,000 to acquire 800,000 cubic yards of sand reserves. The following statements model reflects Ecru's financial condition just prior to purchasing the sand reserves. The company extracted 420,000 cubic yards of sand in year 1 and 360,000 cubic yards in year 2.

Required
a. Compute the depletion charge per unit.
b. Record the acquisition of the sand reserves and the depletion expense for years 1 and 2 in a financial statements model like the precedingone.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...