Homework Answers
Answer to Part a.
Depletion Charge per Unit = Acquisition Cost / Expected
Extraction
Depletion Charge per Unit = 644,000 / 46,000
Depletion Charge per Unit = $14 per Ton
Answer to Part b-1.
Depletion Expense = Depletion Charge per Unit * Extraction in
Year 1
Depletion Expense for Year 1 = $14 * 24,150
Depletion Expense for Year 1 = $338,100
Depletion Expense for Year 2 = $14 * 20,700
Depletion Expense for Year 2 = $289,800
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