Platak,Inc

question 70

Multiple Choice

Platak,Inc.,acquired a silver mine for $4,000,000.The company's survey estimates that 40,000 ounces of silver can be extracted from the mine,but environmental costs to close the mine will be $1,000,000.In the first year of operations,15,000 ounces of silver were extracted.Platak,Inc.,would recognize

• A)depletion expense of $1,500,000.
• B)depreciation expense of $1,500,000.
• C)depletion expense of $1,875,000.
• D)amortization expense of $1,875,000.
• E)environmental expense of $1,000,000.

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