A Coal Mine Cost $1,000,000 and Is Estimated to Hold

question 2

Multiple Choice

A coal mine cost $1,000,000 and is estimated to hold 50,000 tons of coal. There is no residual value. 6,000 tons are extracted and sold during the first year of operations. Calculate depletion expense for the first year.

• A)$100,000
• B)$150,000
• C)$200,000
• D)$120,000