Business, 15.12.2021 18:30 tatejordan02

Binari Mining Company purchased a site containing a mineral deposit during 2019. The purchase price was RM820,000, and the site is estimated to contain 400,000 tons of extractable ore. Binari constructed a building at the site, at a cost of RM500,000, to be used while the ore is being extracted. When the ore reserves are gone, the building will have no further value. Required:

a. Explain the objective of recording depletion of natural resources.
(2 marks)

b. Determine Binari's depletion rate per ton of ore.
(2 marks)

c. Prepare the journal entry to record depletion for the year 2019, when Binarimined and sold 150,000 tons of ore.

(2 marks)

d. Prepare the journal entry to record depreciation on the building for 2019. Binari calculates depreciation on the building using the units-of-production method based on the amount of ore extracted (150,000 tons in 2019).
(2 marks)

Binari Mining Company purchased a site containing a mineral deposit during 2019. The purchase price

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Binari Mining Company purchased a site containing a mineral deposit during 2019. The purchase price...

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