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    Proper accounting for restoration cost

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    LoJo Developers Inc. purchased a coal mine for $10,000,000. As a condition of the purchased, LoJo agreed to restore the land after mining operations ceased. Restoration costs are estimated at $2,500,000. The proper accounting for these restoration cost is:

    o Expense them as incurred.
    o Capitalize and depreciate them over the estimated life of the mine.
    o Add them into the depletion base of the mine.
    o Subtract them from the depletion base of the mine.

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    https://brainmass.com/business/financial-accounting-bookkeeping/proper-accounting-restoration-cost-344519

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