For $18,048,000, R.R. Michaels Refining purchased land which their experts believe to contain 18.8 million tons of bituminous coal. It cost $4,909,000 to develop the property, whose residual value is estimated as $1,805,000. Determine the current year depletion expense if annual production amounted to 3,196,000 tons. Round depletion cost per unit to the nearest cent.
For $18,048,000, R.R. Michaels Refining purchased land which their experts believe to contain 18.8 million tons of bituminous coal. It cost $4,909,000 to develop the property, whose residual value is estimated as $1,805,000. Determine the current year depletion expense if annual production amounted to 3,196,000 tons. Round depletion cost per unit to the nearest cent.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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For $18,048,000, R.R. Michaels Refining purchased land which their experts believe to contain 18.8 million tons of bituminous coal. It cost $4,909,000 to develop the property, whose residual value is estimated as $1,805,000. Determine the current year depletion expense if annual production amounted to 3,196,000 tons. Round depletion cost per unit to the nearest cent.
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Introduction:
Depreciation:
A decrease in the value of fixed assets of the company because of usage, wear and tear and passage of time is known as depreciation. Depreciation is charged at specific percentage on the value of asset over useful life of asset and is deducted from value of asset at end of each accounting period.
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