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Last Chance Mine ( LC ) purchased a coal deposit for $ 7 2 0 , 0 0 0 . It estimated it would extract

Last Chance Mine (LC) purchased a coal deposit for $720,000. It estimated it would extract 12,000 tons of coal from the deposit. LC mined the coal and sold it reporting gross receipts of $1 million for year 1. During year 1, LC reported net income from the coal deposit activity in the amount of $40,000. In year 1, LC actually extracted 2,000 tons of coal.
What is Last Chances percentage depletion for year 1(the applicable percentage for coal is 10 percent)? 
 
  

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