The Orser Mining Company Acquired a Gold Mine for $8,000,000

Multiple Choice

The Orser Mining Company acquired a gold mine for $8,000,000. It is estimated that 40,000 ounces of gold can be extracted from the mine. In the first year of operations, 15,000 ounces of gold were extracted. The Orser Mining Company would recognize:

A) depletion expense of $3,000,000.
B) depreciation expense of $3,000,000.
C) an increase in profit of $3,000,000.
D) cost of goods sold of $3,000,000.