A&Z incurred $452,500 of capitalized costs to develop a uranium mine. The corporation’s geologists estimated that the mine would produce 905,000 tons of ore. During the year, 181,000 tons were extracted and sold. A&Z’s gross revenues from the sales totaled $579,200, and its operating expenses for the mine were $173,760. Required: Calculate A&Z’s depletion deduction.

A&Z incurred $452,500 of capitalized costs to develop a uranium mine. The corporation’s geologists estimated that the mine would produce 905,000 tons of ore. During the year, 181,000 tons were extracted and sold. A&Z’s gross revenues from the sales totaled $579,200, and its operating expenses for the mine were $173,760. Required: Calculate A&Z’s depletion deduction.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Calculate A&Z’s depletion deduction.

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