On January 1, 2022, Last Chance Mine (LCM) purchased a coal deposit for $1,000,000. LCM estimated it would extract 20,000 tons of coal from the deposit. In 2022, LCM mined the coal. LCM extracted 8,000 tons of coal in 2022 and reported gross receipts of $4 million. LCM's 2022 taxable income from the coal deposit (before depletion) is $650,000. What is LCM's percentage depletion for 2022? The depletion percentage for coal is 10% . What is LCM's cost depletion for 2022? Which method will LCM likely use in 2022?
On January 1, 2022, Last Chance Mine (LCM) purchased a coal deposit for $1,000,000. LCM estimated it would extract 20,000 tons of coal from the deposit. In 2022, LCM mined the coal. LCM extracted 8,000 tons of coal in 2022 and reported gross receipts of $4 million. LCM's 2022 taxable income from the coal deposit (before depletion) is $650,000. What is LCM's percentage depletion for 2022? The depletion percentage for coal is 10% . What is LCM's cost depletion for 2022? Which method will LCM likely use in 2022?
Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization
Section: Chapter Questions
Problem 58P
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On January 1, 2022, Last Chance Mine (LCM) purchased a coal deposit for $1,000,000. LCM estimated it would extract 20,000 tons of coal from the deposit. In 2022, LCM mined the coal. LCM extracted 8,000 tons of coal in 2022 and reported gross receipts of $4 million. LCM's 2022 taxable income from the coal deposit (before depletion) is $650,000.
What is LCM's percentage depletion for 2022? The depletion percentage for coal is 10%
. What is LCM's cost depletion for 2022?
Which method will LCM likely use in 2022?
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