In 2013,Bootcamp Mining Inc.purchased land for $5,600,000 that had a natural resource supply estimated at 4,000,000 tons.When the natural resources are removed,the land will have an estimated value of $640,000.The present value of the expected cash outflows for the required restoration cost for the property is estimated to be $800,000.
Development and road construction costs on the land were $560,000,and a building was constructed at a cost of $88,000 with an estimated $8,000 salvage value when all the natural resources have been extracted.
During 2014,additional development costs of $272,000 were incurred,but additional resources were not discovered.Production for 2013 and 2014 was 700,000 tons and 900,000 tons,respectively.
Compute the depletion charge for 2013 and 2014.(Include depreciation on the building,if any,as a depletion charge. )Round depletion charge to the nearest cent.

Question

Quizplus · Accepted Answer

The Answer of In 2013,Bootcamp Mining Inc.purchased land for $5,600,000 that had a natural resource supply estimated at 4,000,000 tons.When the natural resources are removed,the land will have an estimated value of $640,000.The present value of the expected cash outflows for the required restoration cost for the property is estimated to be $800,000.
Development and road construction costs on the land were $560,000,and a building was constructed at a cost of $88,000 with an estimated $8,000 salvage value when all the natural resources have been extracted.
During 2014,additional development costs of $272,000 were incurred,but additional resources were not discovered.Production for 2013 and 2014 was 700,000 tons and 900,000 tons,respectively.
Compute the depletion charge for 2013 and 2014.(Include depreciation on the building,if any,as a depletion charge. )Round depletion charge to the nearest cent.