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6. Zvinakis Mining Company paid $2,600,000 for the rights to mine lead in Southeast Missouri. The equipment to process the lead ore before shipment to
6. Zvinakis Mining Company paid $2,600,000 for the rights to mine lead in Southeast Missouri. The equipment to process the lead ore before shipment to the smelter was $1,800,000. The mine is expected to yield 2,000,000 tons of ore during the five years it is expected to be operating. The equipment is salvageable and is expected to be worth $150,000 when mining is concluded. The mine started operations on April 30, Year 1. In Year 1, 300,000 tons of ore were extracted and in Year 2, 700,000 tons were mined. Compute the depletion rate and the units-of-production depreciation rate. . Compute depletion and depreciation for Year 1 and Year 2
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