Depletion Rate}

Oxford Quarries purchased 45 hectares of land for \(\$ 185,000\). The land contained stone that Oxford will remove from the ground, finish, and then sell as facing material for buildings. Oxford spent \(\$ 435,000\) preparing the quarry for operation. Oxford estimates that the quarry contains 55,000 tonnes of usable stone and that it will require six years to remove all the usable stone once quarrying begins. Oxford estimates that upon completion of quarrying, the land will have a residual value of \(\$ 11,150\). During the current year, Oxford extracted 8,500 tonnes of stone.

\section*{Required:}

1. Compute the depletion rate per tonne.

2. Prepare the journal entry to record the extraction of the stone.

\section*{Exercise