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Question - Beerbo purchased land on February 1, 2020 at a cost of $1,190,000. It estimated that a total of 60,000 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimated that the fair value of this restoration obligation at $90,000. It believes it will be able to sell the property afterwards for $100,000. It incurred developmental costs of $200,000 before it was able to doany mining. In 2020, resources removed total 30,000 tons. Later that year, the company sold 22,000 tons.
Once the mine is set up for extraction, what amount will be the depletion base used to calculation the depletion rate?
What is the depletion rate per ton?
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