[amp_mcq option1=”Initial cost of property times number of unit sold during the year divided by the total units in property” option2=”Initial cost of property divided by the number of units sold during the year” option3=”Initial cost of property times number of units sold during the year” option4=”Initial cost of property divided by the total units in property” correct=”option1″]
The correct answer is: A. Initial cost of property times number of unit sold during the year divided by the total units in property.
The depletion at any given year is equal to the initial cost of the property times the number of units sold during the year divided by the total number of units in the property. This is because the depletion method assumes that the property is being used up over time, and the amount of depletion each year is based on the number of units that have been used up.
Option B is incorrect because it does not take into account the total number of units in the property. Option C is incorrect because it does not take into account the number of units sold during the year. Option D is incorrect because it does not take into account the initial cost of the property.