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2 May, 08:34

A company purchased a tract of land for its natural resources at a cost of $1,981,300. it expects to mine 2,170,000 tons of ore from this land. the salvage value of the land is expected to be $267,000. the depletion expense per ton of ore is:

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  1. 2 May, 08:46
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    Answer: $0.79

    Given:

    C=Cost of the land: $1,981,300

    S=Salvage value of the land: $267,000

    N=Total number of ores mined = 2,170,000 tons

    To get the depletion expense per ton of ore:

    (C-S) / N

    = ($1,981,300-$267,000) / 2,170,000

    =1,714,300/2,170,000

    =$0.79
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