A company paid $1,080,000 to install machinery at a mine estimated to contain 900,000 recoverable tons...
A company paid $1,080,000 to install machinery at a mine estimated to contain 900,000 recoverable tons of ore. The machinery has an estimated life of 12 years and is capable of exhausting the mine in 10 years. If, in the first year of operations, 112,500 tons of ore were mined, the units-of-production depreciation to be recorded is:
A)$135,000
B)$108,000
C)$90,000
D)The other answers are all incorrect.
Homework Answers
Depreciation = (Cost of machine / Recoverable tons) X Tons mined
= ($1,080,000 / 900,000) X 112,500 = $135,000
Option A
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