On January 2, 2010, Adelaide Rose purchased land with valuable natural ore deposits for $13 million. The
Question:
On January 2, 2010, Adelaide Rose purchased land with valuable natural ore deposits for $13 million. The estimated residual value of the land was $4 million. At the time of purchase, a geological survey estimated 3 million tons of removable ore were under the ground. Early in 2010, roads were constructed on the land to aid in the extraction and transportation of the mined ore at a cost of $975,000. In 2010, 75,000 tons were mined. In 2011, Adelaide fired her mining engineer and hired a new expert. A new survey made at the end of 2011 estimated 4.5 million tons of ore were available for mining. In 2011, 265,000 tons were mined. Assuming that all the ore mined was sold, how much was the depletion expense for 2010 and 2011?
Step by Step Answer:
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen