222

$show=home

Welcome to Accounting Education

The Free Online University with 3400+ Accounting contents as study material which can watch, read and learn anyone, anywhere.

Start your studies

Latest Contents$type=three$count=6$author=hide$comment=hide$label=hide$s=hide$show=home$date=hide

$show=home

Why Accounting Education Important


Free
Simple
Have Quality Study Material
Taught by Expert

Connect Vinod Kumar (Educator)

Why Accounting Education Volunteer


Free training
It's educational
It's fun
It helps others

Become Volunteer Teacher

$hide=page

Depletion Method of Depreciation

All natural resources like mines, fuel oil, gas and woods are ending by using them. We calculate the depreciation with depletion method for such perishing assets. Under this method, first, we estimate the total value of assets. After this, we calculate the rate of depreciation per unit by dividing the estimated life in the term of production of units.

Formula 

Depreciation Rate under Depletion Method

= Original Cost - Scrap Value / Estimated life in terms of production units

Explanation of Formula 

A. Original Cost 

We can calculate the original cost of resources  by acquiring cost plus cost for making them for production.

B. Estimated Life or Service Life or Production Life 



C. Scrap Value


Examples 

1. Mr. S purchased a mine for $ 50,000. Its scrap value is $ 5000 and its working life is 9 years. 90000 units were expected to be produced during its working life. 5000 units in the first, 12,500 units in the second and 25000 units in the third year were produced. Find out the amount of depreciation in 1st year, 2nd year and 3rd year.  

Depreciation per unit = 50,000 - 5,000 / 90000 = $ 0.50 per unit



2. ABC Company purchases land for $3,00,000 from which it expects to extract 1,00,000 tons of coal, the estimated residual value is $20,000, and it mines 8,000 tons of coal in the first year. Calculate the depreciation in first years as per depletion method. 



Related Resources : 

Fixed Installment Method
Diminishing Balance Method
Insurance Policy Method of Depreciation 
Revaluation Method of Depreciation 
Machine Hour Rate Method of Depreciation 

COMMENTS

: 2
  1. We Can supply Aviation Kerosene,Jet fuel (JP 54-A1,5), Diesel (Gas Oil) and Fuel Oil D2, D6,ETC in FOB/Rotterdam only, serious buyer should contact or if you have serious buyers my seller is ready to close this deal fast contact us below:now base email us (neftegazagent@yandex.ru)

    PRODUCT AVAILABLE IN ROTTERDAM/ CI DIP AND PAY IN SELLER EX-SHORE TANK.

    Russia D2 50,000-150,000 Metric Tons FOB Rotterdam Port.

    JP54 5000,000 Barrels per Month FOB Rotterdam.

    JA1 Jet Fuel 10,000,000 Barrels FOB Rotterdam.

    D6 Virgin Fuel Oil 800,000,000 Gallon FOB Rotterdam.

    E-mail: neftegazagent@yandex.ru
    E: neftegazagent@mail.ru
    E: neftegazagent@yahoo.com

    Best Regards
    (Mr.) Vladislav Yakov
    Skype: neftegazagent

    Thank You

    ReplyDelete
In comment, you can give your feedback, reviews, ideas for improving content or ask question relating to written content.


Name

access,2,account,87,accountant,92,Accounting,679,accounting definitions,99,accounting ebook,3,Accounting education,85,accounting procedure,2,accounting process outsourcing,2,Accounting Software,54,advance,3,advertising,6,africa,7,Amalgamation,6,amendments,16,announcements,61,Annuity,2,assets,51,audit,46,auditing,41,Australia,2,B.Com.,22,balance sheet,80,bank,111,Bank reconciliation,12,banking,33,basic accounting,110,BBA,1,benefits,13,best,50,bill,12,black money,3,blog,12,bloggers,7,book keeping,4,bookkeeping,2,Branch Accounting - full tutorial,8,budget,35,Budget variance,13,business,65,businessman,9,CA,29,calculator,4,canada,3,capital,72,capital budgeting,27,career,20,cash,40,cash book,8,cash flow statement,8,Chiense,1,children,13,china,6,class,3,coaching,2,coins,2,college,6,commerce,10,commerce students,7,company,36,computer,9,computer accounting,1,conference,4,Contact vinod kumar,1,Control Your Spending,27,corporate accounting,69,cost,159,cost accounting,194,cost center,8,cost centre,1,CPA,2,credit,18,credit card,10,cs,10,currency,35,data,11,Debit and credit,16,debit cards,1,debt,62,debtor,21,degree,6,depletion,2,depreciation,38,Diwali Messages,12,documents,4,dollar,5,domain,3,Downloads,3,Dubai,1,e-accounting,17,earning,17,education,246,Education Loans,6,email,15,employee,4,EPF,2,ERP,7,euromoney,1,examination,7,excel,17,excise duty,6,expenses,65,facebook,7,factor of loan,1,fans,2,feature,32,fifo,5,FII,4,fiji,1,finacle,1,finance,822,Finance Journal Entries,4,Financial,134,financial accounting,144,fire insurance,3,flickr,2,flow,4,forensic,4,forex,21,formula,8,france,1,fraud,6,free,2,fun,34,function,1,fund,48,GAAP,36,GDP,1,gdr,5,germany,1,gold,7,goodwill,4,goodwill accounting,3,google,34,google apps,3,google apps,1,google base,1,google buzz,1,google calendar,1,Google docs,38,google finance,3,google fusion tables,1,google talk,5,govt.,5,GST,33,guide,85,health,6,Hindi,2,Hindi Language,3,history,3,holding company,3,How to treat FBT in Tally 9,1,HRA,3,ICAI,11,ICAWI,3,ICICI Bank,1,IFRS,10,income,17,income statement,16,Income Tax,7,India,57,indian railway,1,Indonesia,1,inflation,4,inflation accounting,3,infographics,8,information,7,inspiration,175,insurance,14,insurance accounting,2,Intangible,3,interest,26,international,7,Internet,41,Introduction of Tally 9,1,inventory,41,investment,135,investment in Shares,6,invoice,3,IT,1,Japan,1,Job costing,4,journal entries,136,Journal Entries eBook Help,4,Kalculate,1,keyboard,3,kuwait,2,laptop,2,law,4,LBT,1,learning,36,lease,5,lecture,11,ledger,15,leducation,1,Leverage Analysis,7,liabilities,16,lifo,3,linkedin,1,loan,74,logical point,1,loss,5,loss of profit,1,M.Com.,5,m.phil,2,malaysia,3,management accounting,129,manual accounting,4,manufacturing account,1,market,11,marketing,3,mastercard,2,material,13,MBA,14,MCA,1,media,4,migration,2,mobile,9,money,61,ms word,3,ms. excel,14,multi currency in tally 9,1,Multicurrency Accounting,3,mutual fund,30,national security,1,new and sacrifice ratio,1,new york times,1,new zealand,1,news,1,NGO,5,nonprofit-accounting,6,North Georgia Mountains,1,Notification,1,NPV,17,NSE,1,odbc,2,office,10,oman,1,online application,2,online accounting,11,Online Accounting Course,4,otcei,1,pakistan,3,parents,3,Partnership,1,pay pal,3,pdf,4,Personal Finance,6,pie chart,1,pie chart of income,2,pnb,5,podcast,1,ppf,1,presentation,10,price,7,privacy policy,2,prof. vinod kumar,13,profit,24,profit and loss account,12,project management,11,provision,13,purchase,9,puzzles,2,quickbooks,2,Quote,22,quotes,42,quotes of svtuition,1,rating agency,2,ratio analysis,34,RBI,7,readers,13,real estate,13,rectification of errors,11,remote control,2,reports,10,reserves,8,responsibility accounting,4,retirement,2,revenue,3,Revenue reserves,2,review,7,risk,11,rupees,9,salary,5,sale,12,saudi arabia,1,saving,19,sbi,9,scholarship,2,school,1,SEBI,13,security,30,service tax,23,share,20,share trading,15,Shares,16,shri lanka,3,singapore,2,sms,6,social accounting,7,society,5,solution,214,South Africa,1,stock,24,stock exchange,22,structure,6,student,39,students,69,study,21,subsidiary company,2,svtuition,13,swiss bank,2,tally,99,tally 9,8,Tally 7.2,8,Tally 9,42,Tally.ERP 9,59,tanzania,2,tax,94,Tax Accounting,30,TDS,15,teacher,62,teaching,112,technology,33,test,40,testimonial,15,testimonials,15,thailand,1,tips,60,trading,5,trading on equity,2,transaction,7,trend,12,trial balance,13,truthfulness,1,tuition,3,twitter,10,UAE,5,UGC - NET Commerce,13,UK,11,United Arab Emirates,1,university,9,usa,25,valuation,8,VAT,22,Video,35,Voucher and vouching,4,Wealth,8,wikipedia,25,working capital,29,youtube,14,
ltr
item
Accounting Education: Depletion Method of Depreciation
Depletion Method of Depreciation
http://2.bp.blogspot.com/-exqLyqO_AU8/UgRCPy1m4LI/AAAAAAAAL3E/UNI9w7acXnU/s640/production+units.PNG
http://2.bp.blogspot.com/-exqLyqO_AU8/UgRCPy1m4LI/AAAAAAAAL3E/UNI9w7acXnU/s72-c/production+units.PNG
Accounting Education
http://www.svtuition.org/2013/08/depletion-method-of-depreciation.html
http://www.svtuition.org/
http://www.svtuition.org/
http://www.svtuition.org/2013/08/depletion-method-of-depreciation.html
true
2410664366776677676
UTF-8
Loaded All Posts Not found any posts VIEW ALL Reply Cancel reply Delete By Home PAGES Contents View All RELATED CONTENTS FOR YOUR LEARNING Topic ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS PREMIUM CONTENT IS LOCKED STEP 1: Share to a social network STEP 2: Click the link on your social network Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy