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At the beginning of the year, NRD Company purchased the rights to a natural resource for $1060000. The estimated recoverable units from the natural resource
At the beginning of the year, NRD Company purchased the rights to a natural resource for $1060000. The estimated recoverable units from the natural resource amount to 330000 units. During the year, NRD sold 33000 units of the natural resource for $10 per unit and incurred operating costs other than depletion of $5 per unit. Based on these facts: Compute NRDs depletion deduction using the percentage method, assume a 15 percent specified depletion percentage.
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