00:01
In this question, you've given different data about dakota mining company and you've asked for different journal entries regarding it.
00:07
The first journal entry that you've asked for is regarding the purchase of the land.
00:13
When you give a journal entry for purchase of land, you would debit land because it's an asset.
00:20
The amount you gave us was $4 ,715 ,000.
00:25
The reason we debit it is because assets increase with debits.
00:30
We paid cash for this.
00:32
Cash is also an asset that decreases with a credit.
00:35
So we would debit cash.
00:39
The second journal entry that you've asked to record is for cost and installation of the machinery.
00:47
Cost and installation of the machinery directly increases the cost of the asset.
00:53
So we would debit machinery because this increases the amount that we had to pay to get my machinery ready for use.
01:01
And then i would credit cash to decrease my cash amount to show that i no longer have this.
01:07
Now, the next step of journal entries is the third question you've asked.
01:14
The third question is to record the first five months of depletion.
01:20
We need to calculate how much this is first.
01:24
The formula is the cost minus the salvage value over the units of capacity.
01:31
You said we had no salvage value.
01:35
The cost is $4 ,715 ,000...