TOPIC: DEPLETION

DEPLETION PROBLEM #4 DD Company was engaged in the rock and gravel business. The following transactions relate to the acquisition and development of an extensive gravel pit: 2019 Cost of acquisition and development 960,000 Estimated output 2,400,000 tons Production 1,000,000 tons 2020 Additional development cost 490,000 Production 600,000 tons 2021 Additional development cost 500,000 New estimate of remaining output 2,500,000 tons Production 700,000 tons REQUIRED: 1. Compute for the carrying amount of the asset for the year ending 2019, 2020, and 2021. 2. Compute for the depletion expense for the year ending 2019, 2020, and 2021