Your company purchases the rights to all the gravel on a piece of property for $100,000 and adds a road to the property owner's land at a cost of $50,000. The expected amount of gravel to be extracted is estimated at 50 tons. In year one, 15 tons of gravel is excavated and 12 tons are sold. What is the journal entry to record the depletion of the asset?
Box 1: Select the best answer
Debit depletion expense $36,000, debit inventory $9,000, credit mineral reserves $45,000