Question

Bering Rock acquires a granite quarry at a cost of $590,000, which is estimated to contain 200,000 tons of granite and is expected to take 6 years to remove. Compute the depletion expense for the first year assuming 38,000 tons were removed.

Answer 1

Answer:

$112,100

Explanation:

The depletion expense for the year is the tons of granite removed in the year divided by the total expected granite removable multiplied by the cost of acquiring the granite quarry of $590,000.

Tons of granite removed in the year is 38,000 tons

total granite removable is 200,000 tons

depletion expense=38,000/200,000*$590,000=$ 112,100.00  

The depletion expense is $112,100

The appropriate journal entry would to debit depletion expense with $112,100 and credit accumulated depletion