On January 1,2017,Whittle,Inc.purchased timber rights for $1,500,000,which are expected to produce a total of 2,000,000 cords of wood over 4 years.The cords of wood cut were 200,000 in 2017 and 280,000 in 2018.Depletion for 2017 equals:
A)$150,000.
B)$200,000.
C)$400,000.
D)$275,000.

Question

Quizplus · Accepted Answer

Depletion expense = Cost × (Actual production ÷ Estimated production)
= $1,500,000 × (200,000 ÷ 2,000,000)= $150,000