Question 1 AHO Jewelry Company purchased gold-leasing land that contains 1,200,000 tons of coal for $35,600,000. The coal is expected to be mined within 12 years. The estimated salvage value of the purchased land will be $4,825,000 once the coal is removed. Test permits were issued by the federal government at a cost of $105,000 to AHO Jewelry. Soil tests by geologists cost $102,500 for the purchased land, but tests at other sites that yielded negative results cost $169,750. AHO Jewelry uses the full-cost method for exploration costs (.e., the company's total exploration and testing costs are treated as one cost pool for the entire company rather than being associated with any one exploration project). Before mining could begin, the company had to build roads and parking spaces of $750,900. In addition, storage facilities and a field office were constructed at a total cost of $381,950. These facilities will last an estimated 15 years but will serve no purpose once the coal is removed; hence, they have no residual value. Machinery that cost $2,422,500 was installed, but its service life is limited to the time required to remove the coal. The buildings and land improvement will be depreciated on a straight-line basis, while the machinery will be depreciated by using the double declining method. In the first year of operation, AHO Jewelry mined 148,000 tons of gold; in the second year, 182,000 tons; and in the third year, 152,000 tons. Required Prepare a schedule showing (a) unit and total depletion and (b) depreciation for the first three years of operation. Assume that the purchase occurred on January 1 and that AHO Jewelry uses a calendar fiscal year