On January 1,Year 1,an Oil Company Purchased 10,000 Hectares of Land

On January 1,Year 1,an oil company purchased 10,000 hectares of land for $5,000,000 and developed an underground oil site on the land.The company spent $11,000,000 to prepare the site for operation but believes that 500,000 barrels of oil can be extracted from the site over five years after drilling begins.The land has a residual value of $250,000.Assuming 50,000 barrels of oil were extracted from the land in Year 2,how much depletion will be recorded?

A) $157,500
B) $160,000
C) $1,575,000
D) $1,600,000