Perry Corp. acquired a tract of land containing an extractab…
Perry Corp. acquired a tract of land containing an extractable natural resource. Perry 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 2,580,000 tons, and that the land will have a value of $940,000 after restoration. Relevant cost information follows: Land $ 7,540,000 Estimated restoration costs $ 1,420,000 If Perry maintains no inventories of extracted material, what should be the charge to depletion expense per ton of extracted material?
Perry Corp. acquired a tract of land containing an extractab…
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Perry Cоrp. аcquired а trаct оf land cоntaining an extractable natural resource. Perry 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 2,580,000 tons, and that the land will have a value of $940,000 after restoration. Relevant cost information follows: Land $ 7,540,000 Estimated restoration costs $ 1,420,000 If Perry maintains no inventories of extracted material, what should be the charge to depletion expense per ton of extracted material?