A coal mine cost $1,001,000 and is estimated to hold 58,000 tons of coal. There is no residual value. During the first year of operations, 6,000 tons are extracted and sold. Calculate depletion expense for the first year. (Round any intermediate calculations to the nearest cent.) + g

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Dulce Ramsey

Business

11 August, 05:53

A coal mine cost $1,001,000 and is estimated to hold 58,000 tons of coal. There is no residual value. During the first year of operations, 6,000 tons are extracted and sold. Calculate depletion expense for the first year. (Round any intermediate calculations to the nearest cent.) + g

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Powell · Answer 1

depletion expense 103,560‬

Explanation:

The first step, is to calculate the rate per ton

coal mine 1,001,000

coal reserve 58,000

We divide the total coal reserve for the mine cost.

depletion rate 1.001.000/58.000 = 17,2586 = 17.26

Then we multiply bythe tons extracted for the period

depletion for the first year 6,000 tonds x 17.26 per ton = 103,560‬

This will be the depletion expense for the year.