In 2016, Western Maryland Company Paid $3,000,000 for a Mining

Multiple Choice

In 2016, Western Maryland Company paid $3,000,000 for a mining tract with reserves of 100,000 tons of ore, which the company planned to mine over a 20-year period. The company spent $500,000 developing the mine. Western plans to spend $200,000 for reclamation when mining has been completed, after which the land will have an estimated value of $600,000. In 2016, Western mined and sold 8,000 tons of ore. What depletion should Western record for the year?

A) $155,000
B) $248,000
C) $280,000
D) $296,000