Multiple Choice
Fortune Drilling Company acquires a mineral deposit at a cost of $5,900,000 and expected salvage value of zero. It incurs additional costs of $600,000 to access the deposit, which is estimated to contain 2,000,000 tons and is expected to take 5 years to extract. Compute the depletion expense for the first year assuming 418,000 tons were mined.
A) $1,233,100.
B) $1,358,500.
C) $1,300,000.
D) $1,180,000.
E) $1,280,000.
Correct Answer:
Verified
Correct Answer:
Verified
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