Engineering
A highway construction company operates a quarry. During the last 5 years, the amount extracted each year was 60,000, 50,000, 58,000 60,000, and 65,000 tons. The mine is estimated to contain a total of 2.5 million tons of usable stones and gravel. The quarry land had an initial cost of $3.2 million. The company had a per-ton gross income of $30 for the first year, $25 for the second year, $35 for the next 2 years, and $40 for the last year. The rate for percentage depletion is 5% (10)(a) Determine the depletion charge each year, using the two depiction methods. Assume all depletion amounts are less than 50% of taxable income.(b) If the quarry operation is reevaluated after the first 3 years of operation and estimated to contain a total of 1.5 million tons remaining, rework part (a).