In 2019, Pearl Company purchased property with natural resources for 28 million. The property has a residual value of 5 million. However, the company is required to restore the property to its original condition and this will require restoration costs of 2 million at the end of five years after which the extraction will be completed. Credit-adjusted risk-free interest rate at this time is 10%. (Round off present value factor to three decimal places).

In 2019, Pearl Company spent 1 million in development costs and 3 million in buildings on the property. Pearl does not anticipate that the buildings will have utility after the natural resources are removed. In 2020, an amount of 1.2 million was spent for additional development on the mine. The tonnage mined and estimated remaining tons for the years 2019 to 2021 are as follows:

Tons extracted Tons remaining

2019 0 10,000,000

2020 3,000,000 7,500,000

2021 3,500,000 2,500,000

How much is the total depletion expense recognized by the Pearl Company for the years 2020 and 2021, respectively? (Round off unit depletion rate to the nearest centavo or two decimal places) *show your solution

a. 7,920,000; 10,815,000

b. 7,920,000; 9,275,000

c. 8,160,000; 11,095,000

d. 8,160,000; 10,815,000