Mighty Mining Company acquired property for $20,000,000 containing a palladium mine on January 1, 2016. Mighty Mining Co. estimated that the mine would produce 1,200,000 tons of palladium and once mining is completed, the property could be sold for $2,000,000. During the first year, 200,000 tons were mined.
What is the depletion expense per ton of palladium?
A) $ 7.50 per ton
B) $16.67 per ton
C) $15.00 per ton
D) $ 2.48 per ton

Question

Quizplus · Accepted Answer

($20,000,000 - $2,000,000) / 1,200,000 = $15.00 per ton

Mighty Mining Company Acquired Property for $20,000,000 Containing a Palladium