A Company Purchased Mining Property Containing 7,350,000 Tons of Ore

question 57

Essay

A company purchased mining property containing 7,350,000 tons of ore for $1,837,500.In 2012 it mined and sold 857,000 tons of ore and in 2013 it mined and sold 943,000 tons of ore.Calculate the depletion expense for 2012 and 2013.What was the book value of the property at the end of 2013?

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Definitions:

Profitable

The condition of earning more revenue than the costs incurred, leading to a financial gain or profit for the individual or organization.

Innovation

The first commercially successful introduction of a new product, use of a new method of production, or creation of a new form of business organization.

Invention

The conception of a new product or process combined with the first proof that it will work.

Diffusion

The spread of an innovation through its widespread imitation.