A company purchased 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 residual value of the land is estimated to be $250,000.What is the amount of depletion per ton of ore?
A)$0.75
B)$0.875
C)$1.14
D)$0.625

Question

Quizplus · Accepted Answer

Depletion per ton = (Cost − Residual value)÷ Estimated number of tons
= ($1,500,000 − $250,000)÷ 2,000,000 = $0.625

A Company Purchased Land for Its Natural Resources at a Cost