Last Chance Mine (LCM) purchased a coal deposit for $1,892,750. It estimated it would extract 16,750...
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Last Chance Mine (LCM) purchased a coal deposit for $1,892,750. It estimated it would extract 16,750 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.30 million, $8.5 million, and $7 million for years 1 through 3, respectively. During years 1-3, LCM reported net income (loss) from the coal deposit activity in the amount of ($19,100), $720,000, and $585,000, respectively. In years 1-3, LCM extracted 17,750 tons of coal as follows: (Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars.) Tons Extracted per Year (1) Tons of Coal 16,750 Depletion (2)/(1) Rate $113.00 Year 1 Year 2 (2) Basis $1,892,750 Year 3 3,200 9,950 4,600 c. Using the cost and percentage depletion computations from parts (a) and (b), what is LCM's actual depletion expense for each year? Depletion Expense Year 1 Year 2 Year 3 $ 0 Last Chance Mine (LCM) purchased a coal deposit for $1,892,750. It estimated it would extract 16,750 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.30 million, $8.5 million, and $7 million for years 1 through 3, respectively. During years 1-3, LCM reported net income (loss) from the coal deposit activity in the amount of ($19,100), $720,000, and $585,000, respectively. In years 1-3, LCM extracted 17,750 tons of coal as follows: (Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars.) Tons Extracted per Year (1) Tons of Coal 16,750 Depletion (2)/(1) Rate $113.00 Year 1 Year 2 (2) Basis $1,892,750 Year 3 3,200 9,950 4,600 c. Using the cost and percentage depletion computations from parts (a) and (b), what is LCM's actual depletion expense for each year? Depletion Expense Year 1 Year 2 Year 3 $ 0
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LCMs cost depletion yeare 2 3 Balance 5 LCMs percentage depletion Particulars year1 a Net I... View the full answer
Related Book For
Taxation Of Individuals And Business Entities 2015
ISBN: 9780077862367
6th Edition
Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
Posted Date:
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