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Home / Questions / In 2007, Rockpit Mining Company purchased a bauxite mine for $12,000,000. At the time of p

In 2007, Rockpit Mining Company purchased a bauxite mine for $12,000,000. At the time of p

In 2007, Rockpit Mining Company purchased a bauxite mine for $12,000,000. At the time of purchase, Rockpit estimated that the mine contained 800,000 tons of bauxite. Rockpit mined and sold 110,000 tons in 2004 and 160,000 tons in 2008.

 

Required:

a.What is the depletion rate per ton?

b.What amount of depletion should be reported 2007 and 2008?

 

 

 

 

 

12.Amalgamated Mining Company originally acquired a copper mine at a cost of $900,000. It was thought to contain 1,600,000 tons of recoverable ore and that the property would be worth $100,000 when the ore was gone.

 

Required:

a.What is the depletion rate per ton?

b.Assume that recoveries of ore were made as follows from the mine:

 

Year 1:  500,000 tons

Year 2:  125,000 tons

Year 3:  400,000 tons

Year 4:  525,000 tons

 

Determine the amount of depletion cost for each year.

Dec 25 2019 View more View Less

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