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In January 20X1, Vorst Company purchased a mineral mine for $2,640,000. Removable ore was estimated at 1,200,000 tons. After it has extracted all the ore,
In January 20X1, Vorst Company purchased a mineral mine for $2,640,000. Removable ore was estimated at 1,200,000 tons. After it has extracted all the ore, Vorst will be required by law to restore the land to its original condition. The expected present value of this obligation is $180,000 Vorst believes it will be able to sell the property after restoration for $300,000 During 201, Vorst incurred $360,000 of development costs to prepare the mine for production, and it removed and sold 60.000 tons of ore Required: In its 201 income statement, what amount should Vorst report as depletion expense? (Do not round intermediate calculations.)
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