Compute the depletion charge for 2009. Round to the nearest cent

On 2009 January 2, York Mining Company acquired land with ore deposits at a cash cost of USD 1,800,000. Exploration and development costs amounted to USD 192,000. The residual value of the land is expected to be USD 360,000. The ore deposits contain an estimated 6 million tons. Present technology will allow the economical extraction of only 85 percent of the total deposit. Machinery, equipment, and temporary sheds were installed at a cost of USD 255,000. The assets will have no further value to the company when the ore body is exhausted; they have a physical life of 12 years. In 2007, 200,000 tons of ore were extracted. The company expects the mine to be exhausted in 10 years, with sharp variations in annual production.

a. Compute the depletion charge for 2009. Round to the nearest cent.

b. Compute the depreciation charge for 2009 under the units-of-production method.

Save your time - order a paper!

Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines

Order Paper Now

c. If all other mining costs, except depletion, amounted to USD 1,260,000, what was the average cost per ton mined in 2009? (The depreciation calculated in b is included in the USD 1,260,000.)

 

Looking for a Similar Assignment? Let us take care of your classwork while you enjoy your free time! All papers are written from scratch and are 100% Original. Try us today! Use Code FREE15