PART B numbers:

Please use 2020 tax laws if applicable

Required information [The following information applies to the questions displayed below.] Last Chance Mine (LCM) purchased a coal deposit for $1,506,450. It estimated it would extract 18,150 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.06 million, $8.3 million, and $4.8 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 ($16,300), $677,500, and $557,500, respectively. In years 1-3, LCM actually extracted 19,150 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 18,150 (2) Basis $1,506,450 Depletion (2)/(1) Rate $83.00 Tons Extracted per Year Year 1 Year 2 Year 3 3,900 10,050 5,200 a. What is LCM's cost depletion for years 1, 2, and 3? Year 1 Cost Depletion $ 323,700 $ 834,150 2 3 $ 431,600 c. Using the cost and percentage depletion computations from parts (a) and (b), what is LCM's actual depletion expense for each year? Year 1 Depletion Expense $ 323,700 $ 495,400 X $ 152,850 X 2 3 b. What is LCM's percentage depletion for each year (the applicable percentage for coal is 10 percent)? Year 1 Percentage Depletion $ 0 $ 338,750 $ 278,750 2 3