Question
In 20x1, OBSTREPEROUS NOISY Mining Corp. acquired the right to use 1,000 acres of land to mine for gold. The lease cost is 200,000,000, and
In 20x1, OBSTREPEROUS NOISY Mining Corp. acquired the right to use 1,000 acres of land to mine for gold. The lease cost is 200,000,000, and the related exploration costs on the property amounted to 40,000,000. It is the policy of OBSTREPEROUS Mining Corp. to capitalize all costs of exploration and evaluation of mineral resources. Intangible development costs of drilling, tunnels, shafts, and wells incurred before opening the mine amounted to 340,00,000. At the end of the mine's economic useful life, OBSTREPEROUS Mining Corp. is required by legislation to restore the site. Estimated restoration costs have a fair value of 20,000,000. OBSTREPEROUS Mining Corp. estimates that the mine will provide approximately 100,000,000 ounces of gold. Actual ounce of gold mined in 20x2 totaled 300,000 ounces.
3. How much is the depletion charge in 20x2? a. 1,740,000b. 1,800,000 c. 165,000 d. 150,000
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