Sergei Company purchases land for $4,000,000 from which it expects to extract 2,000,000 tons of coal. The estimated residual value is $400,000, and it mines 80,000 tons of coal in the first year. The unit depletion rate used to determine yearly depletion will be

Sergei Company purchases land for $4,000,000 from which it expects to extract 2,000,000 tons of coal. The estimated residual value is $400,000, and it mines 80,000 tons of coal in the first year. The unit depletion rate used to determine yearly depletion will be

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 1RE: Susquehanna Company purchased an asset at the beginning of the current year for 250,000. The...

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Question

23 )

Sergei Company purchases land for $4,000,000 from which it expects to extract 2,000,000 tons of coal. The
estimated residual value is $400,000, and it mines 80,000 tons of coal in the first year. The unit depletion rate
used to determine yearly depletion will be
1. $1.80 per ton.
2. $2.00 per ton.
3. $18.00 per ton.
4. $20.00 per ton.

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