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Vlad [161]
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 nearest​dollar.)
A.

​$277,062

B.

​$252,838

C.

​$113,550

D.

​$163,512
Business
1 answer:
balu736 [363]3 years ago
7 0

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

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