7. Jackpot Mining Company operates a copper in central Montana. The company paid $1,100,000 in 2018 for the mining site and spent an additional $620,000 to prepare the mine for extraction of the copper. After the copper is extracted in approximately four years, the company is required to restore the land to its original condition, including repaving of roads and replacing a greenbelt. The company has provided the following three cash flow possibilities for the restoration costs (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVDA of $1) (Use appropriate factor(s) from the tables provided.):

Cash Outflow Probability

1 $320,000 20%

2. 420,000 45%

3. 620,000 35%

To aid extraction, Jackpot purchased some new equipment on July 1, 2018, for $330,000. After the copper is removed from this mine, the equipment will be sold for an estimated residual amount of $24,000. There will be no residual value for the copper mine. The credit-adjusted risk-free rate of interest is 15%.

The company expects to extract 10.2 million pounds of copper from the mine Actual production was 1.8 million pounds in 2018 and 3.2 million pounds in 2019.

Required:

1. Compute depletion and depreciation on the mine and mining equipment for 2018 and 2019. The units-of-production method is used to calculate depreciation. (The expected format for rounding is presented in the appropriate rows of the table. Round your answers to the nearest whole dollar.)

Restoration costs:	Cash outflow	Probability	Probable Restoration Cost
Possibility 1	$ 320,000	20%
Possibility 2	420,000	45%
Possibility 3	620,000	35%
Table or Calculator function:
		n=	4
		i =
Present value of probable restoration costs			_______________
Cost of copper mine:
Mining site	_________
Development cost	_________
Restoration cost	________
	_________
Depletion expense (mine):	2018	2019
Depletion per pound (#.####)
Pounds extracted
Depletion expense
Depreciation expense (mining equipment)	2018	2019
Depreciation per pound (#.##)
Pounds extracted
Depreciation expense