Fortune Drilling Company Acquires a Mineral Deposit at a Cost

question 255

Multiple Choice

Fortune Drilling Company acquires a mineral deposit at a cost of $5,900,000 and expected salvage value of zero. It incurs additional costs of $600,000 to access the deposit, which is estimated to contain 2,000,000 tons and is expected to take 5 years to extract. Compute the depletion expense for the first year assuming 418,000 tons were mined.

• A)$1,233,100.
• B)$1,358,500.
• C)$1,300,000.
• D)$1,180,000.
• E)$1,280,000.

---

Definitions:

College Freshman

A student in their first year of college or university education.

Physics

The scientific study of matter, energy, and the interactions between them.

Being Positive

The practice of maintaining a generally optimistic and hopeful perspective towards life's challenges.

Difficult Change

A challenging transition or modification in one's life, habits, or environment that requires adaptation.