In February 2012, Gemstone Industries Purchased the Opal Mine at a Cost

Multiple Choice

In February 2012, Gemstone Industries purchased the Opal Mine at a cost of $20,000,000. The mine is estimated to contain 500,000 carats of stone and to have a residual value of $1,000,000 after mining operations are completed. During 2012, 50,000 carats of stone were removed from the mine and sold. In this situation:

A) The book value of the mine is $19,000,000 at the end of 2012.
B) The amount of depletion deducted from revenue during 2012 is $1,900,000.
C) The amount of depletion deducted from revenue during 2012 is $1,000,000.
D) The mine is classified as an intangible asset and amortized over a period not to exceed 40 years.