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Homework answers / question archive / On March 31, 2021, M
On March 31, 2021, M. Belotti purchased the right to remove gravel from an old rock quarry. The gravel is to be sold as roadbed for highway construction. The cost of the quarry rights was $184,800, with estimated salable rock of 24,000 tons. During 2021, Belotti loaded and sold 5,300 tons of rock and estimated that 18,700 tons remained at December 31, 2021. At January 1, 2022, Belotti estimated that 10,600 tons still remained. During 2022, Belotti loaded and sold 15,900 tons. Belotti uses the units-of-production method.
Belotti would record depletion in 2021 of:
Cost of quarry = $184800
Salable rock estimated = 24000 tons
Belotti loaded and sold = 5300 tons
Depletion expense for 2021 = 184800/24000 *5300
Depletion expense for 2021 = 7.7 * 5300
Depletion expense for 2021 = 40810
