Chapter $10$ Practice Assignment

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Problem $10-75($L$010-5)($Algo$)$

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Last Chance Mine $($LCM$)$ purchased a coal deposit for $$2,214,900.$ It estimated it would extract $20,700$ tons of coal from the deposit. LCM mined the coal and sold it$,$ reporting gross receipts of $$1\mathrm{.}44$ million, $$8\mathrm{.}2$ million, and $$3\mathrm{.}2$ 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 $($$$12,800),$$$590,000,$ and $$540,000,$ respectively. In years $1-3,$ LCM extracted $21,700$ tons of coal as follows:

$(1)$

$(1)$ Tons of

$(2)$ Basis

Depletion

$20,700$

$$2,214,900$

$(2)(1)$ Rate

Tons Year $1$

Extra

Year

$4,700,11,700$

Year

$$107\mathrm{.}00$

$4,700$

$11,700$

Year $3$

Note: Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars.

Problem $10-75$ Part b $($Algo$)$

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$$ b$.$ What is LCM$\text{'}$s percentage depletion for each year $($the applicable percentage for coal is $10$ percent$)?$

References

$\backslash$table$[[,\backslash$table$[[$Percentage$],[$Depletion$]]],[$Year $1,],[$Year $2,],[$Year $3,]]$