Answer:
Kindly check the explanation section.
Explanation:
STEP ONE: calculate or Determine the depletion expense per unit. .
For oil reserves, the depletion expense = 1376000 - 0/ 257000 - 12000 = $5.76.
For timber, the depletion expense = 2080000 - 112000/ 1770000 = $1.11.
For silver mine, the depletion expense = 1840000 - 0/ 131000 = $14.05.
For Gold mine, the depletion expense = 3070000 - 0/63000 = $48.73.
STEP TWO : Determine or calculate the total depletion expense.
For the year 2018, the total depletion expense for; (a). silver mine= 14.05 × 14800 = $ 207,940.
(b). Timber = 1.11 × 51000 = $566100.
For 2019, the the total depletion expense for; (a). silver mine= 14.05 × 29000 = 407,450
(b). Timber = 1.11 × 370,000 = 410,700.
(c). Gold mine = 48.73 × 4200 = 204,666.
(d). Oil reserve = 5.76 × 83,000 = 478,080.
STEP THREE:
SILVER MINE: 1840000
- Accumulated depletion = ($ 407,450 + $ 207,940) = 615,390.
(1). Thus, 1840000 - 615,390 = 1,224,610.
GOLD MINE = 3070000.
Accumulated depletion = 204,666.
(2). Therefore, we have 3070000 - 204666 = 2,865,334.
TIMBER: 2080000.
Accumulated depletion = ( $566100 + 410,700) = 976,800.
Residual value of land = #112000.
(3). Therefore, (2080000 - 976,800) - 112,000 = 991,200.
OIL RESERVES: 1376000.
Accumulated depletion= 478,080.
(4). Therefore, 1376000 - 478,080 = 897,920.
Hence, we have the total natural resources = (1) + (2). + (3). + (4). =
1,224,610 + 2,865,334 + 991,200 + 897,920 = $ 5,979,064.
Therefore, 5,979,064 - 112,000 = $ 5,867,064.
