Tolan Resources Company acquired a tract of land containing an extractable natural resource.Tolan is required by its purchase contract to restore the land to a condition suitable for recreational use after it has extracted the natural resource.Geological surveys estimate that the recoverable reserves will be 2,000,000 tons, and that the land will have a value of $1,200,000 after restoration.Relevant cost information follows: $\begin{array}{lr}
\text { Land } & \$ 9,000,000 \
\text { Estimated restoration costs } & 1,800,000
\end{array}$

If Tolan maintains no inventories of extracted material, what should be the charge to depletion expense per ton of extracted material?

Question

Tolan Resources Company acquired a tract of land containing an extractable natural resource.Tolan is required by its purchase contract to restore the land to a condition suitable for recreational use after it has extracted the natural resource.Geological surveys estimate that the recoverable reserves will be 2,000,000 tons, and that the land will have a value of $1,200,000 after restoration.Relevant cost information follows: $\begin{array}{lr}
\text { Land } & \$ 9,000,000 \
\text { Estimated restoration costs } & 1,800,000
\end{array}$

If Tolan maintains no inventories of extracted material, what should be the charge to depletion expense per ton of extracted material?

Quizplus · Accepted Answer

The Answer of Tolan Resources Company acquired a tract of land containing an extractable natural resource.Tolan is required by its purchase contract to restore the land to a condition suitable for recreational use after it has extracted the natural resource.Geological surveys estimate that the recoverable reserves will be 2,000,000 tons, and that the land will have a value of $1,200,000 after restoration.Relevant cost information follows: $\begin{array}{lr}
\text { Land } & \$ 9,000,000 \
\text { Estimated restoration costs } & 1,800,000
\end{array}$

If Tolan maintains no inventories of extracted material, what should be the charge to depletion expense per ton of extracted material?

Tolan Resources Company Acquired a Tract of Land Containing an Extractable