How much should you write off as depletion in the first year?

/in /by

A mining company acquired an iron ore deposit for $4,000,000. The company’s geologist estimated the deposit to contain 300,000 tons of iron ore. By the end of the first year, 12,000 tons of ore was extracted.

In the given scenario, will you calculate the depreciation value or the depletion value of the iron ore?

How much should you write off as depletion in the first year?