Zvinakis Mining Company paid $290,000 for the rights to mine lead in southeast Missouri. The cost to drill and erect a mine shaft was $2,490,000, and equipment to process the lead ore before shipment to the smelter was $1,989,000. The mine is expected to yield 2,000,000 tons of ore during the five years it is expected to be operating. The equipment has an estimated residual value of $159,000 when mining is concluded. The mine started operations on April 30, 2018. In 2018, 390,000 tons of ore were extracted, and in 2019, 790,000 tons were mined.

Required: 1. Compute the depletion rate and the units-of-production depreciation rate. 2. Compute depletion and depreciation for 2018 and 2019.

Compute the depletion rate and the units-of-production depreciation rate.

Depletion rate per ton:

Depreciation rate per ton:

Compute depletion and depreciation for 2018 and 2019.

depletion 2018

depletion 2019

depreciation 2018

depreciation 2019