|Purpose:||(L.O. 5) This exercise will give you practice in computing depletion.|
During 2014, Alston Corporation acquired a mineral mine for $2,000,000 of which $450,000 is attributable to the land value after the mineral has been removed. Alston spent $700,000 to prepare the mine for removal of the minerals. Engineers estimate that 15 million units of mineral can be recovered from this mine. During 2014, 1,200,000 units were extracted and sold.
Compute the depletion for 2014.