Cocke Mining Company Purchases a Gravel Pit for $5,000,000

Cocke Mining Company purchases a gravel pit for $5,000,000.It estimates that 10,000,000 tons of gravel can be extracted over the pit's useful life.If 1,000,000 tons are extracted during the first year but only 750,000 tons are sold,what amount should be recorded for Gravel Inventory and Accumulated Depletion,respectively?

A) $125,000 and 375,000
B) $375,000 and $125,000
C) $375,000 and 375,000
D) $125,000 and $500,000

Correct Answer:

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