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Last Chance Mine (LCM) purchased a coal deposit for $1,334,750. It estimated it would extract 14,050 tons of coal from the deposit. LCM mined the
Last Chance Mine (LCM) purchased a coal deposit for $1,334,750. It estimated it would extract 14,050 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.01 million, $4 million, and $2.9 million for years 1 through 3, respectively. During years 1-3, LCM reported net income (loss) from the coal deposit activity in the amount of ($13,800), $592,500, and $522,500, respectively. In years 13, LCM actually extracted 15,050 tons of coal as follows: (Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars.) (1) Tons of Coal 14,050 (2) Basis $1,334,750 Depletion (2)/(1) Rate $95.00 Tons Extracted per Year Year 1 Year 2 Year 3 3,600 7,550 3,900 Problem 10-75 Part a a. What is LCM's cost depletion for years 1, 2, and 3? Year Cost Depletion
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