On January 1^st 2023, Mine Co. obtained the rights to operate a ruby mine. It paid $2 million for these rights and spent and addition $0.5 million on exploring and development costs. The expected output of the mine is 5000 carats of rubies.

The present value of the AROs associated with this mine is $1 million.

In 2023, the mine produced 1000 carats of rubies.

a) How much depletion expense associated with this ruby mine should Mine Co. recognize in 2023?

In January 2024, miners broke through a previously undiscovered vein. The mine is expected a total of 7000 carats (excluding the 1000 carats mined in 2023), and this expected output is used as the total expected output for future depletion going forth.

b) 1800 carats were produced in 2024. How much depletion expense associated with this ruby mine should Mine Co. recognize in 2024?