Nolan Company Acquired a Tract of Land Containing an Extractable $\begin{array}{lr}\text { Land } & \$ 7,000,000 \\\text { Estimated restoration costs } & 1,500,000\end{array}$

Multiple Choice

Nolan Company acquired a tract of land containing an extractable natural resource.Nolan is required by the purchase contract to restore the land to a condition suitable for recreational use after it has extracted the natural resource.Geological surveys estimate that the recoverable reserves will be 5,000,000 tons, and that the land will have a value of $1,000,000 after restoration.Relevant cost information follows: $\begin{array}{lr}\text { Land } & \$ 7,000,000 \\\text { Estimated restoration costs } & 1,500,000\end{array}$ If Nolan maintains no inventories of extracted material, what should be the charge to depletion expense per ton of extracted material?

A) $1.70
B) $1.50
C) $1.40
D) $1.20