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.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 56P

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Calculate A&Z’s depletion deduction.

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