Perez company acquires an ore mine at a cost of $2,380,000. it incurs additional

Depletion expense=$342,000

Explanation:

Total cost of purchasing the ore mine;

Total cost=Purchase cost+access cost

where;

Purchase cost=$2,380,000

Access cost=$666,400

replacing;

Total cost=(2,380,000+666,400)=$3,046,400

Net cost=Total cost-estimated value of land

where;

Total cost=$3,046,400

Estimated value of land=$340,000

replacing;

Net cost=3,046,400-340,000=$2,706,400

Depletion expense=Cost per unit×number of units sold

where;

Cost per unit=(2,706,400/1,700,000)=$1.592 per tonne

Number of units sold=215,000 tons

replacing;

Depletion expense=(1.592×215,000)=$342,000

Depletion expense=$342,000