In 2005 Silverspur mining purchased land for $5,600,000 that had a nat

QUESTION

In 2005 Silverspur mining purchased land for $5,600,000 that had a natural resource supply estimated at 4,000,000 tons. When the natural resources are removed the land has an estimated value of $640,000. The required restoration cost for the property is estimated to be $800,000. Development and road construction costs on the land were $560,000, and a building was constructed for $88,000 with an estimared $8,000 salvage value when all the natural resources have been extracted.During 2005, additional development costs of $272,000 were incurred but no additional resources were discovered. Production for 2004 & 2005 was 700,000 tons and 900,000 tons respectively.Compute the depletion charge for 2004 & 2005 (include depreciation on the building, if any as a depletion charge). Round depletion charge to nearest cent.
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