Help!

Question

Help!

erib · Answer

A coal mine was acquired for $2,000,000. No salvage value was expected, and the company expects to mine 2,000,000 tons of coal. During the first year, it mines and sells 220,000 tons of coal. The depletion expense is
  A. $2,220,000. 	
  B. $2,000,000. 	
  C. $220,000. 	
  D. $24,200.

markchernioglo · Answer

Most accurate answer looks like letter A.

markchernioglo · Answer

@agent0smith  is A correct?

markchernioglo · Answer

Report him guys. Lol this guy probably dropped from space

fakereality · Answer

This is just sad.

mathmate · Answer

@erib Here's a definition of depletion expense http://openstudy.com/study#/updates/57ef43bce4b0df404c00e2c9 You will see that many pieces of information are missing from your question. Perhaps what you posted is a part of a longer question. We need to know at least the cost and sale value of what was extracted, and the number of tons the original mine was worth.

mathmale · Answer

For what amount was the mine purchased?

What is the expected production of this mine, in tons?

What is the per ton depletion rate?

What is the depletion expense if 220,000 tons of coal are produced and sold?

Show your work, please.