RKI Properties' balance sheet includes a natural resource asset, Coal. RKI paid \(\$ 600,000\) cash for the right to work a mine with an estimated 100,000 tons of coal. The company paid \(\$ 60,000\) to remove unwanted buildings and \(\$ 40,000\) to prepare the surface for mining. RKI also signed a \(\$ 50,000\) note payable to an environmental company that will return the land to its original condition. During the first year, RKI removed 40,000 tons of coal, which it sold on account for \(\$ 20\) per ton. Operating expenses for the first year totaled \(\$ 360,000\), half paid in cash and half on account.

Requirements 

1. Record all of RKI's transactions, including depletion, for the year. 

2. Prepare the company's income statement for the year.