Answer:
$367,360
Explanation:
Depletion is an estimated cost of a natural resource that is extracted. This resource is expensed as the extraction is made.
As per given data
Value of Rights = $2,100,000
Additional Cost = $588,000
Total Cost = $2,100,000 + $588,000 = $2,688,000
Estimated resources = 1,500,000 tons
Resources extracted in the period = 205,000 tons
Depletion expense is based on ratio of the amount of extraction in period to the total expected resource.
Depletion Expenses = Total Cost x Resources Extracted in the period / Total resource
Depletion Expenses = Total Cost x Resources Extracted in the period / Total resource
Depletion Expenses = $2,688,000 x 205,000 / 1,500,000 tons = $367,360
