Ceres corporation acquired a mineral mine for $6,000,000 of which $600,000 was ascribed to land value after the mineral has been removed. geological surveys have indicated that 9 million units of the mineral could be extracted. during 2017, 1.8 million units were extracted and 1.2 million units were sold. what is the total amount of depletion recorded in inventory for 2017?

The total amount of depletion recorded in inventory for 2017 is $ 720,000.

Explanation:

Acording to the details, we have the following:

Cost of mineral mine = $6,000,000

Ascribed Land Value = $600,000

Hence, Depletionable Value = $6,000,000-$600,000 = $5,400,000

The No. of units extracted = 9,000,000 and No. of units sold = 1,200,000

Hence, Depletion Value = (5,400,000/9,000,000) * 1,200,000

= $720,000