Coal Miner Co. acquired coal rights for $100,000,000. It is estimated that there are 2,500,000 tons of the resource, and during the current year 500,000 tons were mined and sold. What is the amount of depletion for the current year?

Coal Miner Co. acquired coal rights for $100,000,000. It is estimated that there are 2,500,000 tons of the resource, and during the current year 500,000 tons were mined and sold. What is the amount of depletion for the current year?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

I attached the question that I don't know how to solve. I don't understand from a coal mining perspective how to find the amount of coal depletion for the year.

Coal Miner Co. acquired coal rights for $100,000,000. It is estimated that there are
2,500,000 tons of the resource, and during the current year 500,000 tons were mined and
sold. What is the amount of depletion for the current year?

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