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Compute for the carrying amount of the asset for the year

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Reference no: EM132742233

Problem - DD Company was engaged in the rock and gravel business. The following transactions relate to the acquisition and development of an extensive gravel pit:

2019

Cost of acquisition and development 960,000

Estimated output 2,400,000 tons

Production 1,000,000 tons

2020

Additional development cost 490,000

Production 600,000 tons

2021

Additional development cost 500,000

New estimate of remaining output 2,500,000 tons

Production 700,000 tons

REQUIRED -

1. Compute for the carrying amount of the asset for the year ending 2019, 2020, and 2021.

2. Compute for the depletion expense for the year ending 2019, 2020, and 2021.

Reference no: EM132742233

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