Question

A coal mine cost $972,000. The mine is estimated to hold 54,000 tons of coal and can be mined in 6 years. There is no residual value. During the first year of operations, 11,000 tons are extracted and sold. Calculate depletion expense for the first year.

Answer 1

118,000

Explanation:

1.003M x (6,000/51,000) = 118,000