Bering Rock acquires a granite quarry at a cost of $590,000, which is estimated to contain 200,000 tons of granite and is expected to take 6 years to remove.
-Compute the depletion expense for the first year assuming 38,000 tons were removed and sold.

Question

Bering Rock acquires a granite quarry at a cost of $590,000, which is estimated to contain 200,000 tons of granite and is expected to take 6 years to remove. 
-Compute the depletion expense for the first year assuming 38,000 tons were removed and sold.

Quizplus · Accepted Answer

The depletion expense is calculated by dividing the cost of the quarry by the total estimated tons of granite, then multiplying by the tons removed. ($590,000 / 200,000 tons) * 38,000 tons = $112,100.

Bering Rock Acquires a Granite Quarry at a Cost of $590,000