Carmel Company acquires a mineral deposit at a cost of $5,900,000

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Carmel Company acquires a mineral deposit at a cost of $5,900,000

Carmel Company acquires a mineral deposit at a cost of $5,900,000. It incurs additional costs of $600,000 to access the deposit, which is estimated to contain2,000,000 tons and is expected to take 5 years to extract. Compute the depletion expense for the first year assuming 418,000 tons were mined

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Answer 1

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Answer #1

Depletion expense = depreciation rate * actual output

Depletion rate= = $3.25 per ton

Depletion expense = 3.25*418,000 = $1,358,500

answered by: Bheki

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Answer 2

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Carmel Company acquires a mineral deposit at a cost of $5,900,000

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Carmel Company acquires a mineral deposit at a cost of $5,900,000

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