1.On April 17, 2013, the Loadstone Mining Company purchased the rights to a coal mine. The purchase price plus additional costs necessary to prepare the mine for extraction of the coal totaled $4,500,000. The company expects to extract 900,000 tons of coal during a four year period. During 2013, 240,000 tons were extracted and sold immediately.
Required:
1. Calculate depletion for 2013.
2. Discuss the accounting treatment of the depletion calculated in requirement 1.