If a Mining Company Extracts 2,000,000 Tons in a Period

question 23

Multiple Choice

If a mining company extracts 2,000,000 tons in a period but only sells 1,500,000 tons,

• A) total depletion on the mine is based on the 1,500,000 tons.
• B) depletion expense is recognized on the 2,000,000 tons extracted.
• C) depletion expense is recognized on the 1,500,000 tons extracted and sold.
• D) a separate accumulated depletion account is set up to record depletion on the 500,000 tons extracted but not sold.