On April 2, 2011, Idaho Mining Co. pays $3,506,670 for an ore deposit containing 1,417,000 tons. The company installs machinery in the mine costing $199,400, with an estimated seven-year life and no salvage value. The machinery will be abandoned when the ore is completely mined. Idaho begins mining on May 1, 2011, and mines and sells 137,400 tons of ore during the remaining eight months of 2011.
Prepare the December 31, 2011, entries to record both the ore deposit depletion and the mining machinery depreciation.Mining machinery depreciation should be in proportion to the mine%u2019s depletion.