Cleanburn Coal Company purchased coal-leasing land that contains 800,000 tons of coal for $21,700,000. Soil tests by geologists cost $35,250 for the purchased land, but tests at other sites that yielded negative results cost $116,250. Clearburn uses the full-cost method for exploration costs (i.e., the company's total exploration and testing costs are treated as one cost pool for the entire company rather than being associated with any one exploration project). Test permits were issued by the federal government at a cost of $41,000 to Cleanburn. The estimated salvage value of the purchased land will be $2,325,000 once the coal is removed. The coal is expected to be mined within 10 years.
Before mining could begin, the company had to remove trees and undergrowth at a cost of $387,500. In addition, storage facilities and a field office were constructeda at a total cost of $271,250. These facilities will last an estimated 25 years but will serve no purpose once the coal is removed; hence, they have no residual value. Machinery that cost $1,162,500 was installed, but its service life is limited to the time required to remove the coal. The buildings will be depreciated on a straight-line basis, while the machinery will be depreciated by using the sum-of-the-years'-digits method.
In the first year of operation, Cleanburn mined 30,000 tons of coal; in the second year, 70,000 tons; and in the third year, 75,000 tons.
Required
Prepare a schedule showing (a) unit and total depletion and (b) depreciation for the first three years of operation. Assume that the purchase occurred on January 1 and that Cleanburn uses a calendar fiscal year.