Cannon Mountain Mining paid $488,500 for the right to extract mineral assets from a 400,000-ton dep. In addition to the purchase price, Cannon also paid a $500 filing fee, a $1,000 license fee to the state of Nevada, and $90,000 for a geological survey of the property. Since Cannon bought only therights for the minerals, he expects the asset to have a residual value of zero. During the first year, Cannon removed 20,000 tons of the minerals.
Required
1. Make the daily entry to register
the purchase of minerals (charge mineral assets)
payment of fees and other costs
exhaustion for the first year.