Answer:
$ 56,250
Explanation:
Actual cost after salvage value:
= Total cost - salvage value
= 800,000 - 50,000
= 750,000
Total tons of minerals = 120,000
Total tons of minerals mined = 9,000
Percentage of minerals mined:
= Total tons of minerals mined ÷ Total tons of minerals
= 9,000 ÷ 120,000
= 7.5%
Depletion expense:
= Actual cost after salvage value × Percentage of minerals mined
= 750,000 × 7.5%
= $ 56,250
Answer:
$56,250
Explanation:
Step 1 -
Depletion per unit = Cost - Salvage Value / Total units of capacity
6.25 = 800,000 - 50,000 / 120,000
Step 2 -
Depletion expense = Depletion per unit x Units extracted and sold in period
56,250 = 6.25 x 9,000
