Question

"Steel Rolling Corp. purchased a​ mine, which holds an estimated​ 39,000 tons of iron​ ore, on January​ 1, 2017, for​ $522,000. The mine is expected to have zero residual value. The business extracted and sold​ 17,500 tons of ore in 2017 and​ 15,800 tons of ore in 2018. What is the depletion expense for​ 2017?"

Answer 1

$234,230.77

Step-by-step explanation:

Depletion expense = (amount of ore extracted/ total capacity of the mine) x purchase price.

(17,500 / 39,000) × $522,000 = $234,230.77

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