Exercise 11-17 Cost of a natural resource; depletion and depreciation; Chapters 10 and 11 [LO11-2, 11-3] Jackpot Mining Company operates a copper mine in central Montana. The company pald $13 50,000 in 2018 for the mining sie and spent an additional $670,000 to prepare the mine for extraction of the copper. After the copper is extracted in approximate.y 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 (EV of $1. PV of $1. FVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.): Cash Outflow $370, 000 470, 000 670, 000 Probability 25% 45% 30% To aid extraction, Jackpot purchased some new equipment on July 1, 2018, for $133,000. After the copper is removed from this mine, the equipment will be sold for an estimated residual amount of $26,000. There will be no residual value for the copper mine. The credit-adjusted risk-free rate of interest is 11%. The company expects to extract 10.7 million pounds of copper from the mine. Actual production was 2.3 million pounds in 2018 and 37 million pounds in 2019. Required: 1. Compute depletion and depreciation on the mine and mining equipment for 2018 and 2019. The units-of-production method is used to calculate depreciation. (The expected format for rounding is presented in the appropriate rows of the table. Round your final answers to nearest whole dollar.) Probable Restoration Cost Probability Cash outflow Restoration costs: 25% Possibility 1 370,000 2$ 45% 470,000 Possibility 2 30% 670,000 Possibility 3 %24 Table or Calculator function: Present value of probable restoration costs Cost of copper mine: Mining site Next