1. A sum of 2,500,000 was spend in purchasing and developing a mine having an estimated...

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1. A sum of 2,500,000 was spend in purchasing and developing a mine having an estimated reserves of 230,000 tonnes of ore. During the first year, 20,000 tonnes of ore were extracted. A re-estimate of the remaining reserve was then revised to 170,000 tonnes. During the second year 18,000 tonnes were extracted. Compute the depletion allowance for the first and second years. (8) 1. A sum of 2,500,000 was spend in purchasing and developing a mine having an estimated reserves of 230,000 tonnes of ore. During the first year, 20,000 tonnes of ore were extracted. A re-estimate of the remaining reserve was then revised to 170,000 tonnes. During the second year 18,000 tonnes were extracted. Compute the depletion allowance for the first and second years. (8)

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Mine Purchase Cost S 2500000 Expected Reserve estimate... View the full answer