Calculate the cost depletion allowance and percentage depletion allowance. Indicate which is the most favorable calculation method for tax purposes. 3. Data Cost of acquiring mineral rights Recoverable reserves estimate Allowable Percent Depletion Rate for Coal Minerals sold, year t Mineral Sales Revenue $3,000,000 1,875,000 tons 125,000 tons $118,000 $531,000 Taxable Income w/ no depletion write-off, year t Cost Depletion Allowance Percentage Depletion Allowable Preferred Option to Minimize Taxes