Super-Mineral Began Operations Last Year (Year 1)on a Mineral Tract

question 8

Multiple Choice

Super-Mineral began operations last year (year 1) on a mineral tract and expected a yield of 2,000,000 tons of a valuable ore used in the semiconductor industry.The total balance in the Depletion Base account (or "Natural Resources" account) was $2,000,000 before any depletion was recognized.During year 1,400,000 tons of the ore were removed.Then,early in year 2,a new vein of ore was discovered holding an estimated additional 1,600,000 tons of ore.800,000 tons were removed in year 2.What is depletion in year 2?

• A) $1,600,000
• B) $800,000
• C) $600,000
• D) $400,000

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Definitions:

Adequacy of Consideration

An evaluation of whether the value exchanged between parties in a contract is reasonably fair at the time of the agreement.

Bargained-for Exchange

An essential principle of contract law involving the mutual exchange of promises or consideration between parties entering an agreement.

Legal Sufficiency

The adequacy of evidence or legal grounding in an agreement, claim, or defense that meets minimum legal standards to proceed or withstand scrutiny in a court of law.

Legal Right

An entitlement derived from a legal system that allows or empowers a person to act in a certain way or requires others to interact with the person according to specified rules.