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Land containing a mine having an estimated 1,000,000 tons of economically extractable ore is purchased for $375,000. after the ore deposit is removed, the land will be worth $75,000. if 100,000 tons of ore are mined and sold during the first year, the depletion cost charged to expense for the year is:

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saiyan7x
should your answr  be a ratio it is 75/375

The correct option for the depletion cost charged to expense for the year is: C. USD 30,000

The depletion charge for the first year is:

Depletion charge per ton = ( USD375,000 - USD75,000 )

                                          = USD 0.30

Depletion charge for the year = USD 0.30 × 100,000

                                                  = USD 30,000

Since all of the ore that was extracted was sold, all of the USD 30,000 is expensed as the cost of ore sold.

What are economically important minerals?

Economic minerals include: energy minerals, metals, construction minerals, and industrial minerals. Energy minerals are used to produce electricity, fuel for transportation, heating for homes and offices, and in the manufacture of plastics. Energy minerals include coal, oil, natural gas, and uranium.

Your question is Incomplete. Please read below for the missing content.

Land containing a mine having an estimated 1,000,000 tons of economically

extractable ore is purchased for USD 375,000. After the ore deposit is removed, the land will be worth USD 75,000. If 100,000 tons of ore are mined and sold during the first year, the depletion cost charged to expense for the year is:

a. USD 300,000.

b. USD 37,500.

c. USD 30,000.

d. USD 375,000.

e. None of the above.

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