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Unformatted text preview: method . d) Given GAAP’s general approach to financial reporting, particularly the matching principle, which of the three depreciation methods would be the most appropriate method and why? e) Compute the gain or loss resulting from the sell of the harvesting machine for $60,000 at the end of the second year (assume straight line). Be sure to label it as a gain or a loss. Natural Resources Depletion Example-Appalachian Coal Co. purchased a coal mine that is expected to produce 17,500 tons of coal. The total acquisition cost of the mine was $550,000. The company plans to keep the mine for 7 years after which it will sell the mine’s remnants for $25,000. During the first year of operation, 2,500 tons of coal was excavated from the mine....
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