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Dennis_Churaev [7]
3 years ago
11

Weber Company purchased a mining site for $1,750,000 on July 1. The company expects to mine ore for the next 10 years and antici

pates that a total of 400,000 tons will be recovered. The estimated residual value of the property is $150,000. During the first year, the company extracted 6,500 tons of ore. The depletion expense is
a. $15,000
b. $17,500
c. $26,000
d. $16,000
Business
1 answer:
stepan [7]3 years ago
3 0

Answer:

c. $26,000 

Explanation:

Depletion expense is a method of expensing the cost of using natural resources.

Depletion expense = (actual tons extracted/ total estimated tons to be extracted) × ( Cost - Salvage value)

6500 / 400,000 × (1,750,000 - $150,000)

0.016250 × $1,600,000 = $26,000

I hope my answer helps you

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