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.

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.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 29CE

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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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