Striker Mining company paid $13,500,000 for a parcel of land, including the mining rights. In addition, the company spent $1,850,000 to prepare the site for mining operations. When mining is completed, it is estimated that the residual value of the asset will be $1,000,000. Mining engineers estimate that the site contains 5,000,000 tons of coal.
A)What is the average depletion cost per ton?
B)If 335,000 tons were mined in the first year of operation, what is the amount of the depletion cost?

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The Answer of Striker Mining company paid $13,500,000 for a parcel of land, including the mining rights. In addition, the company spent $1,850,000 to prepare the site for mining operations. When mining is completed, it is estimated that the residual value of the asset will be $1,000,000. Mining engineers estimate that the site contains 5,000,000 tons of coal.

Striker Mining Company Paid $13,500,000 for a Parcel of Land