Question

In: Accounting

The Weber Company purchased a mining site for $600,683.00 on July 1. The company expects to...

The Weber Company purchased a mining site for $600,683.00 on July 1. The company expects to mine ore for the next 10 years and anticipates that a total of 82,462 tons will be recovered. The estimated residual value of the property is $41,429.00. During the first year the company extracted 6,460 tons of ore. What is the depletion expense for the first year?

Select the correct answer.

$55,925.40

$43,811.46

$47,056.97

$41,429.00

Solutions

Expert Solution

Cost of Mine = $600683.00

Residual Value = $41429.00

Total No. of units = 82462 Units

No. of units during the year =6460 Units

Depletion Expenses for the first year = Cost - Residual Value X No. of Units

                                                                         Total No. of Units

                                                                

                                                                 = $600683.00 – 41429.00 X 6460

                                                                                       82462

                                                                   = $43811.46

Hence, $43811.46 should be the correct answer.

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ekkarill92 answered 2 years ago
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