Answer:
$144,000
Explanation:
Calculation to determine what amount should Vorst report as depletion
First step is to calculate the Depletion base using this formula
Depletion base= Purchase price +Development costs+Estimated restoration costs-Expected salvage value
Let plug in the formula
Depletion base=$2,640,000+ $360,000+$180,000-$300,000
Depletion base=$2,880,000
Second step is to calculate the depletion
Depletion= ($2,880,000 / 1,200,000 tons).
Depletion=$2.40 per ton
Now let calculate the Depletion expense
Depletion expense =$2.40 per ton ×60,000 tons sold
Depletion expense=$144,000
Therefore the amount that Vorst should report as depletion is $144,000
