29 Jun Question On January 2, 2014, Ade
Question
On January 2, 2014, Adelaide Rose purchased land with valuable natural ore deposits for $13 million . The estimated residual value of the land was $4 million. At the time of purchase, a geological survey estimated 3 million tons of removable ore were under the ground. Early in 2014, roads were constructed on the land to aid in the extraction and transportation of the mined ore at a cost of $975,000. In 2014, 75,000 tons were mined. In 2015, Adelaide fired her mining engineer and hired a new expert. A new survey made at the end of 2015 estimated 4.5 million tons of ore were available for mining. In 2015, 265,000 were mined. Assuming that all the ore mined was sold, how much was the depletion expense for 2014 and 2015?
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