Kelly runs a gold mine that is expected to produce 100,000 ounces of gold. The statutory percentage for depleting gold mines is 15%, and the percentage for iron ore is 20%. This year, she and her corporate staff will mine 600 ounces from the mine. Kelly had gross receipts from the mine of $200,000 and had a net income before depletion of $5,000. She paid $500,000 for the mine.

What is the maximum depletion Rodonna can take this year?

A. 30,000 

B. 2,500 

C. 3,000 

D. 40,000

Answer rating: 100% (QA)

My answer is Option C Maximum depletion is lower ... View the full answer