To compute cost depletion, you must know the basis subject to depletion, the recoverable quantity of the natural resource, and the quantity of the natural resource sold during the year.

Question

Quizplus · Accepted Answer

Cost depletion is calculated by dividing the basis subject to depletion by the recoverable quantity of the natural resource, and then multiplying that amount by the quantity of the natural resource sold during the year. Therefore, knowledge of all three factors (basis subject to depletion, recoverable quantity, and quantity sold) is necessary to calculate cost depletion.

To Compute Cost Depletion, You Must Know the Basis Subject