Wiert Company purchased land containing an estimated 8,000,000 tons of iron ore for $24,000,000. The land will be worth $3,600,000 without the ore after eight years of active mining. Although the equipment needed for the mining will have a useful life of 20 years, it is not expected to be usable and will have no value after the mining on this site is complete. Compute the depletion charge per ton and the amount of depletion expense for the first year of operation, assuming that 900,000 tons of ore are mined and sold. Also, compute the first-year depreciation on the mining equipment using the production method, assuming a cost of $28,800,000 with no residual value.
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