On March 31, 2016, M. Belotti purchased the right to remove gravel from an old rock...

Question

Question

On March 31, 2016, M. Belotti purchased the right to remove gravel from an old rock quarry. The gravel is to be sold as roadb

Answer 1

Answer #1

The depletion expense for the period 2016 is calculated as follows:

Depletion expense = Total cost / Total estimated saleable rock * Rock extracted and sold in 2016

= ($210,600 / 27,000 ton) * 5,400 ton

= $7.80 * 5,400 ton

= $42,120

Therefore option 2 is correct.

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Answer 2

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