Item8

4.5points

Item8

A company incurred costs of $16.2 million for the rights to extract resources from a natural gas deposit. The company expects to extract 9.0 million cubic feet of natural gas during a six-year period. Natural gas extracted during years 1 and 2 were 870,000 and 1,730,000 cubic feet, respectively. What was total depletion for year 1 and year 2, assuming the company uses the units-of-production method? Note: Do not round intermediate calculations.

Multiple Choice

$9.00 million

$5.40 million

$3.11 million