Mid Atlantic Energy Company’s balance sheet includes the asset Iron Ore. Mid Atlantic Energy paid $2.4 million cash for the right to work a mine that contained an estimated 195,000 tons of ore. The company paid $63,000 to remove unwanted buildings from the land and $73,000 to prepare the surface for mining. Mid Atlantic Energy also signed a $34,100 note payable to a landscaping company to return the land surface to its original condition after the lease ends. During the first year, Mid Atlantic Energy removed 32,500 tons of ore, of which it sold 25,000 tons on account for $33 per ton. Operating expenses for the first year totaled $246,000 all paid in cash. In addition, the company accrued income tax at the tax rate of 28%.

Requirements
1. Record all of Mid Atlantic Energy’s transactions for the year.
2. Prepare the company’s income statement for its iron ore operations for the first year. Evaluate the profitability of the company’s operations.
3. What balances should appear from these transactions on Mid Atlantic Energy’s balance sheet at the end of its first year of operations?