Choice Mining Co

question 31

Multiple Choice

Choice Mining Co. paid $9,000 for some land that was expected to have 50,000 units of a natural resource on it. Development costs amounted to $520. It was expected that the land would require $780 of reclamation costs after production. In the first year of mining, 5,000 units of the natural resource were mined. At the beginning of the second year, it was estimated that only 40,000 units of the natural resource remained and estimated reclamation costs should be increased to $960. In the second year, 8,000 units were mined. What was the amount of depletion for the second year?

• A) $1,714
• B) $1,854
• C) $1,890
• D) $2,046