In March, Mallory Mines Co. purchased a coal mine for $8,000,000. Removable coal is estimated at 1,500,000 tons. The company incurred $2,000,000 of development costs preparing the mine for production. Mallory is required to restore the land at the end of the life of the mine, 5 years. The company has an interest rate of 8%. The cash flows related to the restoration of the mine are as follows:

 Cash flow Probability

 $450,000 30% 

 $500,000 40%

 $650,000 30%

During the year, 450,000 tons were removed and 300,000 tons were sold.

What is the cost of the coal mine to be depleted?

What is the depletion rate?

What is the total dollar amount of depletion expense (i.e. COGS) recorded?

What is the total dollar amount of inventory, if any, at year end?