In 2011, Heslop Mining Company purchased property with natural resources for $5,400,000. The property was relatively close to a large city and had an expected residual value of $700,000.

The following information relates to the use of the property:

(a) In 2011, Heslop spent $300,000 for development costs and $500,000 for buildings on the property. Heslop does not anticipate that the buildings will have any utility after the natural resources are depleted.

(b) In 2012 and 2014, $200,000 and $700,000, respectively, were spent for additional developments on the mine.

(c) The tonnage mined and estimated remaining tons for years 2011-2015 are as follows:

Instructions:
Compute the depletion and depreciation expense for the years 2011-2015.

Transcribed Image Text:

Year 2012 2013 2014 2015 4,000,000 2,800,000 1,800,000 900,000 1,100,000