Last Chance Mine (LCM) purchased a coal deposit for $750,000. It estimated it would extract 12,000 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1 million, $3 million, and $2 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 ($20,000), $500,000, and $450,000, respectively. In years 1–3, LCM extracted 13,000 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 (2) Basis Depletion (2)/(1) Rate Tons Extracted per Year Year 1 Year 2 Year 3 12,000 $ 750,000 $ 62.50 2,000 7,200 3,800 What is LCM's percentage depletion for each year (the applicable percentage for coal is 10 percent)?
Last Chance Mine (LCM) purchased a coal deposit for $750,000. It estimated it would extract 12,000 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1 million, $3 million, and $2 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 ($20,000), $500,000, and $450,000, respectively. In years 1–3, LCM extracted 13,000 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 | (2) Basis | Depletion (2)/(1) Rate | Tons Extracted per Year | ||
|---|---|---|---|---|---|
| Year 1 | Year 2 | Year 3 | |||
| 12,000 | $ 750,000 | $ 62.50 | 2,000 | 7,200 | 3,800 |
What is LCM's percentage depletion for each year (the applicable percentage for coal is 10 percent)?
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