Chapter 18 Problem 18-4
2008 Rock and gravel property 960,000
Cash 960,000
Depletion (1,000,000 x .40) 400,000
Accumulated depletion 400,000
2009 Rock and gravel property 490,000
Cash 490,000
Depletion (600,000 x .75) 450,000
Accumulated depletion 450,000
237
Total cost (960,000 + 490,000) 1,450,000
Less: Accumulated depletion 400,000
Depletable cost 1,050,000
Divide by estimated remaining output (2,400,000 – 1,000,000) 1,400,000
Revised depletion rate per ton .75
2010 Rock and gravel property 500,000
Cash 500,000
Depletion (700,000 x .44) 308,000
Accumulated depletion 308,000
Total cost 1,450,000
Add: Additional development cost 500,000 Total 1,950,000
Less: Accumulated depletion (400,000 + 450,000) 850,000 Remaining depletable cost 1,100,000
Divide by new estimated remaining output 2,500,000
New depletion rate .44
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