Joseph Company Acquired a Tract of Land Containing an Extractable

question 68

Multiple Choice

Joseph Company acquired a tract of land containing an extractable natural resource. Joseph is required by the 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 2,500,000 tons and that the extraction will be completed in five years. Relevant cost information follows:

What should be the depletion charge per ton of extracted material?

• A) $4.00
• B) $4.37
• C) $3.97
• D) $3.60

---

Definitions:

Expanded Markets

Markets that have grown in size or scope, allowing for increased business opportunities and consumer choices.

Constitution

The fundamental principles or established precedents according to which a state or other organization is governed.

Territory

An area of land under the jurisdiction of a ruler or state, often denoting non-state regions with a degree of autonomy.

State

A political entity with a defined territory, government, and the capacity to enter into relations with other states.