Total amount of depletion basics


In March, 2012, Maley Mines Co. purchased a coal mine for $8,000,000. Removable coal is estimated at 1,500,000 tons. Maley is required to restore the land at an estimated cost of $960,000, and the land should have a value of $840,000. The company incurred $2,000,000 of development costs preparing the mine for production. During 2012, 450,000 tons were removed and 300,000 tons were sold. The total amount of depletion that Maley should record for 2012 is:

A) $2,748,000.

B) $3,036,000.

C) $1,832,000.

D) $2,024,000.

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Accounting Basics: Total amount of depletion basics
Reference No:- TGS066935

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