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Lucky Strike Mine (LLC) purchased a silver deposit for $1,500,000. It estimated it would extract $500,000 ounces of silver from the deposit.Lucky Strike mined the
Lucky Strike Mine (LLC) purchased a silver deposit for $1,500,000. It estimated it would extract $500,000 ounces of silver from the deposit.Lucky Strike mined the silver and sold it reporting gross receipts of $1.8 million, $ 2.5 million, and $2 million for years 1 through 3, respectively. During years 1-3 , Lucky Strike reported net income (loss) from the silver deposit activity in the amount of ($100,000), $400,000 and $100,000 respectively. In year 1-3, Lucky Strike actually extracted 300,000 ounces of silver as follows: Ounces extracted per year Year 1. Year 2. Year 3 50,000. 150,000. 100,000 What is Lucky Strike's depletion expense for year 2 if the applicable percentage depletion for silver is 15 percent? A $200,000 B. $375,000 C. $400,000 D. $450,000 E. None of the choices are correct
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