Chapter 11, Problem 3CPA

To determine

Depletion:

Depletion is a concept which is same as depreciation. It is the allocation of cost of natural resources to expense over resource’s the useful time in a systematic and normal manner.

$\text{Depletion Cost per Unit }=\frac{\text{Cost of the asset }-\text{ Residual value}}{\text{Estimated Number of Units}}$

$\text{Depletion Expense}=\left(\begin{array}{l}\text{Depletion Cost per Unit }\\ \times \text{ Number of units Extracted and Sold}\end{array}\right)$

To Calculate: The total depletion in year 1.