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In 2012,Albert Mining Co

question 58

Essay

In 2012,Albert Mining Co.purchased a coal mine that contained an estimated 1,000,000 tons of coal for a cash price of $7,500,000.The company mined 250,000 tons of coal in 2012.
Required:
a)What is the depletion charge per ton of coal?
b)What is the amount of depletion expense for 2012?


Definitions:

European Call Option

A European call option is a type of options contract that gives the holder the right, but not the obligation, to buy an underlying asset at a specific price only on the expiration date.

Specified Date

A specific calendar date agreed upon as relevant or due for a particular activity or event.

Specified Price

Another term for Strike Price, indicating the predetermined price involved in a contractual agreement.

Convertible Bonds

Bonds that can be converted into a predetermined amount of the issuing company's equity at certain times during its life, usually at the discretion of the bondholder.

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