Question

Cameron Corp. purchased a mine on January​ 1, 2018, for $ 503,000​, which is estimated to contain 36,000 tons of iron ore. There is no residual value. The business extracted and sold 7,500 tons of ore in 2018 and 16,800 tons of ore in 2019. What is the depletion expense for​ 2019?

Answer 1

$234,733.33

Step-by-step explanation:

The computation of the depletion expense is shown below:

= Purchase value of a mine ÷ estimated tons × extracted and sold tons of ore in 2019

= $503,000 ÷ 36,000 tons × 16,800 tons

= $234,733.33

We simply applied the above formula so that the depletion expense could come and we ignored the extracted and sold tons ore in 2018