Great Northern Iron Ore Properties purchased a mine for $25,000,000. It is expected that the mine can be sold for $1,500,000 after all of the taconite has been mined. The mine contains approximately 8,000,000 tons of iron ore. 1,000,000 tons of iron ore were mined in year 1. 1,500,000 tons of iron ore were mined in year 2.

Calculate the amount of depletion for years 1 and 2. Record the journal entry for each year.

At the beginning of year 3, 1,750,000 tons of iron ore were sold. Compute cost of goods sold and ending inventory.