On July 1, 2010, Hurtig Inc. invested $720,000 in a mine estimated to have 800,000 tons of ore of uniform grade. During the last 6 months of 2010, 100,000 tons of ore were mined and sold.
(a) Prepare the journal entry to record depletion expense.
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(b) Assume that the 100,000 tons of ore were mined, but only 80,000 units were sold. How are the costs applicable to the 20,000 unsold units reported?