11.In 2007, Rockpit Mining Company purchased a bauxite mine for $12,000,000. At the time of purchase, Rockpit estimated that the mine contained 800,000 tons of bauxite. Rockpit mined and sold 110,000 tons in 2004 and 160,000 tons in 2008.
Required:
a.What is the depletion rate per ton?
b.What amount of depletion should be reported 2007 and 2008?
12.Amalgamated Mining Company originally acquired a copper mine at a cost of $900,000. It was thought to contain 1,600,000 tons of recoverable ore and that the property would be worth $100,000 when the ore was gone.
Required:
a.What is the depletion rate per ton?
b.Assume that recoveries of ore were made as follows from the mine:
Year 1: 500,000 tons
Year 2: 125,000 tons
Year 3: 400,000 tons
Year 4: 525,000 tons
Determine the amount of depletion cost for each year.