Question - Madeena Co. acquired the right to use 1,000 acres of land in South Africa to mine for silver. The lease cost is $50,000, and the related exploration costs on the property are $100,000. Intangible development costs incurred in opening the mine are $850,000. Madeena Co. estimates that the mine will provide approximately 100,000 ounces of silver.
If Madeena Co. extracts 25,000 ounces in the first year, Show the journal entry for depletion and statement of financial position to show Silver Mine.