On January 1, 2011, Cooper Tree Company (CTC) Purchases a Copper

question 223

Multiple Choice

On January 1, 2011, Cooper Tree Company (CTC) purchases a copper mine for €10,000,000.The mine is estimated to have 20 million tons of copper and no residual value.CTC estimates that it will take 10 years to extract all the copper contained in the mine.CTC spends an additional €2,000,000 during the early part of 2011 preparing the mine.During 2011, CTC extracts 3 million tons of copper; however due to price fluctuations none of the copper is sold during 2011.On CTC's financial statement for 2011, how would the depletion associated with the extracted copper be reported?

• A)As an expense on the income statement.
• B)As inventory on the statement of financial position.
• C)As a loss on the income statement.
• D)As part of comprehensive income(unrealized gain).