Tolan Resources Company acquired a tract of land containing an extractable natural resource. Tolan is required by its purchase contract to restore the land to a condition suitable for recreational use after it has extracted the natural 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

Development costs 980,000

1. If Tolan maintains no inventories of extracted material, what should be the charge to depletion expense per ton of extracted material? Show your work.

1. What is the total amount of depletion expense if 425,800 tons are extracted and sold during the year?