1. In January 2016, Adler Corporation purchased a coal mine for $800,000. The mine had been producing minerals for several years, but it had an estimated 120,000 tons remaining at the time of purchase. During 2016, 16,800 tons were mined and sold for $386,400. Costs of operating the mine were as follows:

Labor for operating and servicing mining equipment $120,000

Repairs to equipment $21,000

Real Estate taxes on mine $46,000

Costs of gasoline to operate equipment $5,200

a. Compute Adlers taxable profit from the mine after taking into consideration all expenses incurred in operating the mine.

b. What is Adlers basis in the mine at the end of 2016?