On April 17, 2013, the Loadstone Mining Company purchased the rights to a coal mine. The purchase
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On April 17, 2013, the Loadstone Mining Company purchased the rights to a coal mine. The purchase price plus additional costs necessary to prepare the mine for extraction of the coal totaled $4,500,000. The company expects to extract 900,000 tons of coal during a four-year period. During 2013, 240,000 tons were extracted and sold immediately.
Required:
1. Calculate depletion for 2013.
2. Discuss the accounting treatment of the depletion calculated in requirement 1.
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Related Book For
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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