Question

The Weber Company purchased a mining site for $527,108 on July 1. The company expects to mine ore for the next 10 years and anticipates that a total of 82,993 tons will be recovered. During the first year the company extracted 5,802 tons of ore. The depletion expense is

Answer 1

Answer:

$36,849.86

Explanation:

Depletion cost is used to allocate the costs of extracting natural resources.

Depletion expense = (depreciable cost / total tons that can be recovered ) x tons recovered in a given year

(527,108 / 82,993) x 5802 = $36,849.86