Energy Company owns rights to coal reserves in several states. The rights cost the company $140 million. The reserves were expected to produce a total of 50 billion tons of coal. During the company’s 2004 fiscal year, five billion tons of coal were mined from the reserves. Prior to 2004, 30 billion tons of coal had been mined. How much depletion expense should the company record in 2004? At what amount should the company report the coal reserves on its balance sheet at the end of 2004? What effect would the depletion expense have on the company’s cash flows in 2004?