In the current year Deb acquires for $450,000 an oil and gas property interest with 150,000 barrels of estimated recoverable oil. During the year 20,000 barrels of oil are sold for $260,000. Intangible drilling and development costs amount to $120,000 and are expensed in the current year. Other expenses are $90,000. Which of the following statements is not true with regard to this information?

1. Debs basis in the property is reduced by the depletion taken for the year.

2. The depletion which must be taken for the year is the lesser of cost or percentage depletion.

3. Percentage depletion is $39,000.

4. None of the answers provided is correct.

5. Cost depletion is $60,000.