Fulton Sand and Gravel paid $800,000 to acquire 1,200,000 cubic yards of sand r e serves. The following statements model reflects Fulton€™s financial condition just prior to purchasing the sand reserves. The company extracted 650,000 cubic yards of sand in year 1 and 450,000 cubic yards in year 2.

Required
a. Compute the depletion charge per cubic yard.
b. Record the acquisition of the sand 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.

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Assets Equity Rev.-Exp.-Net Inc. Cash Flow Cash Sand Res. Com. Stk. Ret. Ean. 900,000 + NA 900,000 NA NA NA NA NA - =