A company purchased a tract of land for its natural resources at a cost of $1,500,000.It expects to mine 2,000,000 tons of ore from this land.The salvage value of the land is expected to be $250,000.The depletion expense per ton of ore is:

A) $0.75.
B) $0.625.
C) $0.875.
D) $6.00.
E) $8.00.

Question

Taylor Rooney · Accepted Answer

Final Answer : B, Explanation :  Depletion Expense per ton of ore = (Cost of land - Salvage value) / Estimated tons of ore= ($1,500,000 - $250,000) / 2,000,000= $0.625 per ton of ore.

A company purchased a tract of land for its natural resources at a cost of $1,500,000.It expects to mine 2,000,000 tons of ore from this land.The salvage value of the land is expected to be $250,000.The depletion expense per ton of ore is:

A) $0.75.
B) $0.625.
C) $0.875.
D) $6.00.
E) $8.00.

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Learning Objectives

Related questions

A company purchased a tract of land for its natural resources at a cost of $1,500,000.It expects to mine 2,000,000 tons of ore from this land.The salvage value of the land is expected to be $250,000.The depletion expense per ton of ore is:A) $0.75.B) $0.625.C) $0.875.D) $6.00.E) $8.00.

Definitions

Learning Objectives

Learning Objectives

Related questions

A company purchased a tract of land for its natural resources at a cost of $1,500,000.It expects to mine 2,000,000 tons of ore from this land.The salvage value of the land is expected to be $250,000.The depletion expense per ton of ore is:

A) $0.75.
B) $0.625.
C) $0.875.
D) $6.00.
E) $8.00.