If a Mining Company Extracts 1,500,000 Tonnes in a Period

question 168

Multiple Choice

If a mining company extracts 1,500,000 tonnes in a period but only sells 1,200,000 tonnes,

• A) accumulated depreciation on the mine is based on the 1,200,000 tonnes.
• B) depreciation included in cost of goods sold is based on the 1,500,000 tonnes extracted.
• C) depreciation included in cost of goods sold is based on the 1,200,000 tonnes extracted and sold.
• D) a separate accumulated depreciation account is set up to record depreciation on the 300,000 tonnes extracted but not sold.

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