Colorado Mining paid $506,000 to acquire a mine with 46,000 tons of coal reserves. The financial statements model in Required B reflects Colorado Minings financial condition just prior to purchasing the coal reserves. The company extracted 24,150 tons of coal in year 1 and 20,700 tons in year 2.

Required:

1. Compute the depletion charge per ton.
2. Record the acquisition of the coal reserves and the depletion expense for years 1 and 2 in a financial statements model.