Question
Radical company acquired a mineral right for 30,000,000 in January 2017. The mine has a recoverable ore estimated to 4,000,000 tons. After it has extracted
Radical company acquired a mineral right for 30,000,000 in January 2017. The mine has a recoverable ore estimated to 4,000,000 tons.
After it has extracted all the ore, the entity will be required by law to restore the land to the original condition at a discounted amount of 2,000,000. The entity believed that the property can be sold afterwards for 5,000,000 Early in 2017,roads were constructed and other development costs were incurred to aid in the extraction and trasportation of the mined ore at a cost of 6,000,000. In 2017, 200,000 tons ore were mined and sold. On December 31, 2018 a new survey made by a new mining engineer indicated that 5,000,000 tons of ore were available for mining. In 2018, 225,000 tons of ore were extracted and sold.
What amount of depletion expenses should be recognized for 2018?
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