DEPLETION:

Depreciation = annual quantity * rate of depreciation

Rate of depreciation= cost of mines/estimated minerals to be extracted

1. A mine was purchases for rs 20,00,000 on 1st Jan 2001 and it was estimated content of being
1,00,000 tons. The actual quantity was 2001 20,000 tones

2002 25,000 “

2003 30,000 “

You are required to prepare a mine account using depletion method of depreciation for
the above said years.

2. A mine was acquired at a cost of rs 5, 00,000 on 1 st June 17.it was expected if would yield
1,00,000tonnesa of mineral’s in all. The actual output was follows.

2017 500tons

2018 20,000

2019 16,000

2020 14,000

Write up the mine account for the above years using depletion method for charging
depreciation.