What is the total amount of depletion


At the beginning of 2014, Aristotle Company acquired a mine for $636,480. Of this amount, $79,200 was ascribed to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists have indicated that approximately 12,060,000 units of the ore appear to be in the mine. Aristotle incurred $134,640 of development costs associated with this mine prior to any extraction of minerals. It also determined that the fair value of its obligation to prepare the land for an alternative use when all of the mineral has been removed was $31,680. During 2014, 2,448,000 units of ore were extracted and 2,216,000 of these units were sold.

Compute the following.

 

The total amount of depletion for 2014. (Round per unit answer to 2 decimal places, e.g. 0.45 for computational purpose and final answer to 0 decimal places, e.g. 45,892.)

 


The amount that is charged as an expense for 2014 for the cost of the minerals sold during 2014. (Round answer to 0 decimal places, e.g. 45,892.)

 

 

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Accounting Basics: What is the total amount of depletion
Reference No:- TGS040341

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