On September 1,2010,Drill Far Company Purchased a Tract of Land

Multiple Choice

On September 1,2010,Drill Far Company purchased a tract of land for $2,300,000.The land is estimated to have a salvage value or $50,000,a useful life of four years,and contain an estimated 4,234,000 tons of iron ore.The company also purchased equipment to use in the extraction process that cost $220,450.The company plans to abandon the equipment when the ore is completely mined.During 2010,the company extracted and sold 1.25 million tons of ore.What is the depletion expense recorded for 2010?

A) $575,000
B) $679,027
C) $664,250
D) $562,500
E) $600,000