In February 2015,Brilliant Industries purchased the Topaz Mine at a cost of $10,000,000.The mine is estimated to contain 500,000 carats of stone and to have a residual value of $500,000 after mining operations are completed.During 2015,50,000 carats of stone were removed from the mine and sold.In this situation:
A) The book value of the mine is $9,000,000 at the end of 2015.
B) The amount of depletion deducted from revenue during 2015 is $950,000.
C) The amount of depletion deducted from revenue during 2015 is $1,000,000.
D) The mine is classified as an intangible asset and amortized over a period not to exceed 40 years.
Correct Answer:
Verified
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