A company purchased a tract of land for its natural resources at a cost of $1,83

Question

A company purchased a tract of land for its natural resources at a cost of $1,830,800. It expects to mine 2,120,000 tons of ore from this land. The salvage value of the land is expected to be $262,000. The depletion expense per ton of ore is:

A.) $8.092.

B.) $0.740

C.) $0.987.

D.) $6.988.

E.) $0.864.

A company purchased a tract of land for its natural resources at a cost of $1,830,800. It expects to mine 2,120,000 tons of ore from this land. The salvage value of the land is expected to be $262,000. The depletion expense per ton of ore is:

Explanation / Answer

tract of land for its natural resources at a cost= $1830800

Salvage value=$262000

The Depletion expense = $262000-$1830800/$2120000

=$0.740   

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