Cameron Corp. purchased a mine on January 1, 2018, for$530,000, which is estimated to contain 35,000 tons of iron ore. There

Question

3 years ago

11

Cameron Corp. purchased a mine on January 1, 2018, for$530,000, which is estimated to contain 35,000 tons of iron ore. There

is no residual value. The business extracted and sold 7,500 tons of ore in 2018 and 10,800 tons of ore in 2019. What is the depletion expense for 2019? (Round any intermediate calculations to two decimal places, and your final answer to the nearestdollar.)
A.

$277,062

B.

$252,838

C.

$113,550

D.

$163,512

Business

1 answer:

balu736 [363] · Answer 1 · 2022-05-26T16:20:05+03:00

Answer:

D.$163,512

Explanation:

Depletion expense is a charge against profits for the use of natural resources.

Depletion rate = cost to purchase resource/ number of units = $530,000/ 35,000 tons = $15.14 per ton

Depletion expense for 2019 = Depletion rate * number of units extracted and sold in 2019 = $15.14 * 10,800 = $163,512

Cameron Corp. purchased a mine on January​ 1, 2018, for​$530,000, which is estimated to contain​ 35,000 tons of iron ore. There

Cameron Corp. purchased a mine on January 1, 2018, for$530,000, which is estimated to contain 35,000 tons of iron ore. There