(Solved by Humans)-Problem 6-29 Accounting for depletion Favre Exploration Corporation engages in the exploration...

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Problem 6-29      Accounting for depletion Favre Exploration Corporation engages in the exploration and development of many types of natural resources. In the last two years, the company has engaged in the following activities: Jan. 1, 2012     Purchased a coal mine estimated to contain 200,000 tons of coal for $800,000. July 1, 2012    Purchased for  $1,950,000 a tract of  timber estimated to yield 3,000,000    board feet of  lumber and to have  a residual land value of    $150,000.   July 5, 2012    Purchased a silver mine estimated to contain 30,000 tons of  silver for  $750,000. Aug. 1, 2012   Purchased for $736,000 oil reserves estimated to contain 250,000 barrels of    oil, of  which 20,000 would be unprofitable to  pump. Required a.     Determine the amount of depletion expense that would be recognized on the 2012 income statement for each of the four reserves, assuming 70,000 tons of coal, 1,000,000 board feet of lumber, 9,000 tons of silver, and 50,000 barrels of oil are extracted. b.     Prepare the portion of the December 31, 2012, balance sheet that reports natural resources.