Answer:
D. $4,000 increase
Explanation:
Net Income = Sales revenue - Variable costs - Special costs (for executing this order)
15 X 3,000 - 12 X 3,000 - 1 X 3,000
Or, Net Income = 30,000 - 24,000 - 2,000
Or, Net Income = 4,000
Thus, option D is the correct answer.
Answer:
The Journal entry is as follows:
Depletion expense - Coal Deposit A/c Dr. $280,000
To Accumulated depletion -Coal Deposit $280,000
(To record the depletion expense for the current year)
Workings:
Depletion per ton = (cost - Salvage) ÷ Total units of production
= ($900,000 - $100,000) ÷ 200,000
= $4 per ton
Depletion expense = Tonnage tons mined current year × Depletion per ton
= 70,000 tons × $4
= $280,000
D. it can help u narrow down.......
