A coal mine cost $ 1 comma 001 comma 000and is estimated to hold 57 comma 000tons of coal. There is no residual value. During the first year of operations, 12 comma 000tons are extracted and sold. Calculate depletion expense for the first year. (Round any intermediate calculations to the nearest cent.)

Question

Stewart

Business

8 May, 20:15

A coal mine cost $ 1 comma 001 comma 000and is estimated to hold 57 comma 000tons of coal. There is no residual value. During the first year of operations, 12 comma 000tons are extracted and sold. Calculate depletion expense for the first year. (Round any intermediate calculations to the nearest cent.)

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Mike Hartman · Answer 1

Depletion expenses for the first year is $210736.840

Explanation:

Depletion expenses = (Cost of coal mine - residual value) / Total tons of coal * tons extracted

= (1,001,000 - $0) / 57,000 tons * 12,000 tons

=$210736.8421

=$210736.840