Question: Washington Company has acquired the rights to a developed coal mine at a cost of $2,100,000.
Washington Company estimates that when the company is finished mining the coal, it will be able to sell the land for $179,000. Geological experts estimate a total of 384,200 tons of coal is in the mine.
During the first year, 95,700 tons of coal is brought out of the mine, and 62,000 tons of coal is sold.
Required: Compute the amount of depletion expense for the current year.