00:01
So for the answer here, we go through each requirement.
00:05
First is to compute depletion and depreciation for 2021 and 2022.
00:17
Depletion per ton would be the total cost of the mine divided by estimated ton of ore, which is 2 ,200 ,000 divided by 400 ,000.
00:39
We get 5 .5 per ton.
00:47
And depletion expense for 2021.
00:59
Ton extracted in 2021 multiplied by depletion per ton.
01:04
Ton extracted 50 ,000 multiplied by 5 .5, we get 2 ,75 ,000.
01:14
And depreciation for structure and equipment is based on the unit of product method.
01:19
Since no information is given about the expected total product of this structure and equipment, we cannot calculate the depreciation for this, so the depletion expense is only that one we can calculate it here.
01:33
And for 2022, revised estimated tons of ore, depletion per ton is the total cost of the mine divided by revised estimated tons of ore, 2 ,300 ,000 divided by revised is 400 ,000 plus 87 ,500, which is 4 ,800 ,000.
02:18
We get 4 .5 per ton.
02:23
And depletion expense would be additional ton extracted in 2022, 80 ,000 multiplied 4 .5 is 360 ,000.
02:53
Depreciation for structure and equipment.
02:57
Depreciation for 2022 is tons stocked in 2022 multiplied by depreciation per ton.
03:09
60 ,000 multiplied 5 .5, we get 338 ,000.
03:19
And for the second point, you compute the book value as of december, december, 2022.
03:28
So book value minus of december, 2022, total depletion of 2021 in 2022 minus total cost of the mine.
03:47
So we get 275 plus 360...