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Question - The Peter Noone Company paid $200,000 for the rights to mine lead in Southeast Missouri and $2,400,000 to drill and erect a mine shaft. Equipment was also purchased for $1,800,000 to process the lead ore before shipment to customers. The mine is expected to yield 2,000,000 tons of ore during the 5 years it is expected to be in operation. Peter will not have to reclaim the land when mining is complete; it will be used as an "off road" park for all terrain vehicles. The equipment is salvageable and is expected to be worth $100,000 when mining is concluded. The mine started operations on January 1, 2019, and 300,000 tons of ore were extracted during the year.
Total depreciation recorded by Peter Noone in 2019 is:
A) $340,000
B) $360,000
C) $270,000
D) $255,000
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