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On January 1, Year 1, Gemstone Mining Company (GMC) paid $10,580,000 cash to purchase the...

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On January 1, Year 1, Gemstone Mining Company (GMC) paid $10,580,000 cash to purchase the rights to extract raw stone from a surface pit estimated to hold 50,000 pounds of useable material. GMC extracted 18,000 pounds of stone in Year 1,30,400 pounds of stone in Year 2, and 33,000 pounds of stone in Year 3. The rights to the surface pit were expected to have a $580,000 salvage value at the end of Year 3 . Based on this information, the amount of depletion expense shown on the Year 3 income statement is: Multiple Choice $6,600,000. $320,000. $10,000,000. $9,680,000

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