Depletion (show work)

34. Jake Co. paid $4,000,000 for a mining tract with expected reserves of 100,000 tons of ore. The company spent $600,000 developing the mine. When the mining has been completed, Jake will have to clean up the debris from mining and recondition the land. The estimated fair value of the clean-up and recondition is $200,000 (valued in present-day dollars), after which the land will have an estimated value of $700,000. In the current year, Jake Co. mined and sold 20,000 tons of ore. What amount of depletion should Jake Co. record for the year? a. $800,000 b. $820,000 C. $920,000 d. $960,000