A Company Purchased a Tract of Land for Its Natural

Multiple Choice

A company purchased a tract of land for its natural resources at a cost of $1,500,000.It expects to mine 2,000,000 tons of ore from this land.The salvage value of the land is expected to be $250,000.If 150,000 tons of ore are mined during the first year,the journal entry to record the depletion is:

A) Debit Depletion Expense $93,750;credit Natural Resources $93,750.
B) Debit Cash $112,500;credit Natural Resources $112,500.
C) Debit Depletion Expense $93,750;credit Accumulated Depletion $93,750.
D) Debit Cash $93,750;credit Accumulated Depletion $93,750.
E) Debit Depletion Expense $112,500;credit Accumulated Depletion $112,500.