Monroe Minerals Company purchased a copper mine for $121,500,000. The mine was expected to produce 50,000 tons of copper over its useful life. During Year 1, the company extracted 6,300 tons of copper. The copper was sold for $4,800 per ton. Assume that the company incurred $8,505,000 in operating expenses during Year 1. Based on this information, how much net income would Monroe report in Year 1? Multiple Choice $14,931,000. $6,426,000. $6,804,000. $15,309,000.
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Monroe Minerals Company purchased a copper mine for $121,500,000. The mine was expected to produce 50,000 tons of copper over its useful life. During Year 1, the company extracted 6,300 tons of copper. The copper was sold for $4,800 per ton. Assume that the company incurred $8,505,000 in operating expenses during Year 1. Based on this information, how much net income would Monroe report in Year 1?
Multiple Choice
$14,931,000.
$6,426,000.
$6,804,000.
$15,309,000.
The amount that a person or business keeps after costs, reimbursements, and taxes is known as net income. A company's net income is the sum that remains after all expenses, including salaries and wages, the cost of goods or raw materials, and taxes, have been covered.
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