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TivuiEii - ' [The following information applies to the questions displayed below.] Last Chance Mine (LCM) purchased a coal deposit for $1,223,950. It
TivuiEii " - ' [The following information applies to the questions displayed below.] Last Chance Mine (LCM) purchased a coal deposit for $1,223,950. It estimated it would extract 13,450 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.22 million, $8 million, and $6.5 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 ($12,200), $655,000, and $537,500, respectively. In years 1-3, LCM extracted 14,450 tons of coal as follows: (1) Tons of Coal 13,450 (2) Basis $1,223,950 Depletion (2)/(1) Rate $91.00 Tons Extracted per Year Year 1 2,250 Year 2 7,700 Year 3 4,500 Note: Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars. Problem 10-75 Part c (Algo) c. Using the cost and percentage depletion computations from parts (a) and (b), what is LCM's actual depletion expense for each year? Answer is complete but not entirely correct. Depletion Expense Year 1 $ 205,750 Year 2 $ 700,700 Year 3 $ 318,500
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