Santa fe purchased the rights to extract turquoise on a tract of land over a five-year period. santa fe paid $429,000 for extraction rights. a geologist estimates that santa fe will recover 6,500 pounds of turquoise. during the current year, santa fe extracted 1,950 pounds of turquoise, which it sold for $277,000. what is santa fe's cost depletion expense for the current year?

a. $85,800
b. $128,700
c. $156,440
d. $429,000
e. none of these

cost depletion expense =  $128700

so correct option is B. $128,700

Explanation:

given data

paid = $429,000

recover = 6,500 pounds

extracted = 1,950 pounds

sold = $277,000

to find out

cost depletion expense

solution

we get here cost depletion expense that is express as

cost depletion expense = × extracted   ...........1

put here value we get

cost depletion expense = × 1950

cost depletion expense =  $66 × 1950

cost depletion expense =  $128700

so correct option is B. $128,700

it is d i just took the test

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