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Sparkle company acquired a tract of land Sparkle Company acquired a tract of land containing an extractable mineral resource. Sparkle is required by its purchase
Sparkle company acquired a tract of land
Sparkle Company acquired a tract of land containing an extractable mineral resource. Sparkle is required by its purchase contract to restore the land to a condition suitable for recreational use after it has extracted the mineral resource. Geological surveys estimate that the recoverable reserves will be 2,000,000 tons, and that the land will have a value of $1,200,000 after restoration. Relevant cost information follows: Land $9,000,000 Estimated restoration costs 1,800,000 If Sparkle maintains no inventories of extracted material, what should be the charge to depletion expense per ton of extracted material? $Step by Step Solution
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