On January 2, Year 1, Diggory Venn, Inc., began extraction at a mine it had recently purchased in Eastern Kentucky. The site cost the company $12,000,000 to purchase and required another $1,200,000 to prepare for extraction. The company estimates that the site will require $450,000 of restoration costs at the end of its useful life and can then be sold for $850,000. On the day extraction began, Diggory Venn estimated that it could recover 5,120,000 tons of coal from the mine. Actual production tonnage for the first 4 years of operation was 660,000, 700,000, 680,000, and 680,000, respectively.

During Year 5, more stringent federal legislation was passed concerning the remediation of former mines. These regulations, which also reduced the amount of coal that could be extracted each year, were effective January 1, Year 5. Early in Year 5, management produced the following revised estimates concerning this mine.

Restoration costs $1,000,000

Residual value 1,000,000

Remaining recoverable tons 2,500,000

Actual production tonnage for the last 4 years of operation was 635,000, 630,000, 620,000, and 615,000.

Enter the appropriate amounts in the designated cells below. Enter all amounts as positive values.

Year ended December 31

Depletion expense

1. Year 1

2. Year 2

3. Year 3

4. Year 4

5. Year 5

6. Year 6

7. Year 7

8. Year 8