Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

WD Mining Company purchased a section of land for $600,000 in 2002 to develop a zinc mine. The mine began operating in 2004. At that

WD Mining Company purchased a section of land for $600,000 in 2002 to develop a zinc mine. The mine began operating in 2004. At that time, management estimated that the mine would produce 200,000 tons of quality ore. A total of 100,000 tons of ore was mined and processed from 2004 through December 31, 2011. During January 2012, a very promising vein was discovered. The revised estimate of ore still to be mined was 250,000 tons. Estimated salvage value for the mine land was $100,000 in both 2004 and 2012. Assuming that 10,000 tons of ore was mined in 2012, the computation WD Mining Company should use to determine the amount of depletion to record in 2012 would be

a. (($600,000 2-$100,000)/450,000 tons) × 10,000 tons.

b. (($600,000 2-$100,000)/350,000 tons) × 10,000 tons.

c. (($600,000 2-$100,000-$250,000)/350,000 tons) × 10,000 tons.

d. (($600,000 2-$100,000-$250,000)/250,000 tons) × 10,000 tons.

Step by Step Solution

3.47 Rating (147 Votes )

There are 3 Steps involved in it

Step: 1

QUESTION WD Mining Company purchased a section of land for 600000 in 2... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: James D. Stice, Earl K. Stice, Fred Skousen

16th Edition

324376375, 0324375743I, 978-0324376371, 9780324375749, 978-0324312140

More Books

Students also viewed these Accounting questions

Question

What are the factors affecting organisation structure?

Answered: 1 week ago

Question

What are the features of Management?

Answered: 1 week ago

Question

Briefly explain the advantages of 'Management by Objectives'

Answered: 1 week ago