Shamrock Mining Company has purchased a tract of mineral land for $990,000. It is estimated that this tract will yield 132,000 tons of ore with sufficient mineral content to make mining and processing profitable. It is further estimated that 6,600 tons of ore will be mined the first and last year and 13,200 tons every year in between. (Assume 11 years of mining operations.) The land will have a salvage value of $33,000. The company builds necessary structures and sheds on the site at a cost of $39,600. It is estimated that these structures can serve 15 years but, because they must be dismantled if they are to be moved, they have no salvage value. The company does not intend to use the buildings elsewhere. Mining machinery installed at the mine was purchased secondhand at a cost of $66,000. This machinery cost the former owner $165,000 and was 50% depreciated when purchased. Shamrock Mining estimates that about half of this machinery will still be useful when the present mineral resources have been exhausted, but that dismantling and removal costs will just about offset its value at that time. The company does not intend to use the machinery elsewhere. The remaining machinery will last until about one-half the present estimated mineral ore has been removed and will then be worthless. Cost is to be allocated equally between these two classes of machinery.

Shamrock Mining Company has purchased a tract of mineral land for 5990,000 It is estimated that this tract will yicld 132,000 tons of orc with sufficicnt mincral content to make mining and processing prnlitahle. Tt is turther estiated that 6,00 tosaf re will he minel the irst and last year ad 13,200 tons every year in betweer. (Aume 11 years of mining operations) The larid will have a salvage value of S33,000. 3rd Yr 4th Yr The Lurripany builds ne::essary structures drid sheds cm 1h site dL cos ul $39,600, 11 is estimated that these structures can serve 15 years but, because they must be dismantled if they are to be moved, they have no salvage value. Ihe company does not intend to use he buildings elsewhere, Mining machinery installed at the mine was purchased secondhand at a cost of 566,000 This machinery cost the former owner S 165,000 and was 50% deprociated when purchasod. Shamrack Mining estimates that ahauthalt af this machinery wil useful when the presernt rnineral esoures ave beer exhausted, but that disa and reoval usts wil ut about offset its value at that time. The company does not intend to use the machinery elsewhere. The remaining machinery wl last until about one-half the present estimated mineral ore has been removed and will then be worthless, Cost is to be allocated equally betwoen these two classes of eth Yr 7h Yr ath Y 'Y 11 Yr As chief accountant for the company, you are to prepare a schedule showing estimated depletion and depreciation costs for cach ycar of the cxpcctod life of the mine, (Round per unit answers to 2 decimal places, eg. 0.45 for computational purposes and final answers to 0 Estimated depletion cos Depletionn Also compute the depreciation and deplet on for the first year assuming actual production of 3,500 tons. Nothing occurred duning the year to cause the company engineers to change their cstimates of cither the mincral resources or the life of the structures and oquipment. (Round per unit arswers to 2 decimal places, e.g. 0.45 for mputatioral puurjases and tinal answers to O decimal plascesy e.g. 45,892.) 1 Yr 3rd Yr 1th Yr Sth Yr 6th Yr Dcpreciation 8th Yr 9th Y uth Yr 11th Yr Estimated depreciation cost Year ing achinery (1/2)Machinery (1/2)