Valcourt Corporation acquired the right to mine a piece of land at a cost to lease...

 

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Valcourt Corporation acquired the right to mine a piece of land at a cost to lease of $600,000. The related excavation, costs were $1,000,000, while developmental costs were an additional $8,000,000, all of which will contribute to Valcourt extracting a total of 25,000 tonnes. In the first year of operations Valcourt extracted and sold 5,000 tonnes, while in its second year the company extracted 6,500 tonnes but only sold 6,000 tonnes. Instructions 1. Calculate the depletion cost per unit: 2. Prepare the journal entry to record the amount of depletion for the first two years. Year 1 Year 2 Debit Credit Valcourt Corporation acquired the right to mine a piece of land at a cost to lease of $600,000. The related excavation, costs were $1,000,000, while developmental costs were an additional $8,000,000, all of which will contribute to Valcourt extracting a total of 25,000 tonnes. In the first year of operations Valcourt extracted and sold 5,000 tonnes, while in its second year the company extracted 6,500 tonnes but only sold 6,000 tonnes. Instructions 1. Calculate the depletion cost per unit: 2. Prepare the journal entry to record the amount of depletion for the first two years. Year 1 Year 2 Debit Credit

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1 Calculate the depletion cost per unit as follows The depletion cost per unit is calculated ... View the full answer