13.Roughdig Corporation paid $9,250,000 for a coal mine estimated to contain three million tons of coal. Residual value of the property after removal of all the coal was estimated to be $250,000. What is the depletion cost per ton of coal?
14.On October 1, 2007, Saphire Mining Company acquired, at a cost of $14,000,000, the mineral rights to a piece of property it already owned. Management estimated that the property contained approximately 11,200,000 tons of ore. By December 31, 2007, a total of 350,000 tons of ore had been removed from the property and processed.
Required:
Describe how the two events below should be accounted for.
a.The acquisition of the mineral rights.
b.Removal of 350,000 tons of ore.