Last Chance Mine (LCM) purchased a coal deposit for $1,108,250. It estimated it would extract 17,050 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.28 million, $6.7 million, and $5.1 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 ($21,000), $685,000, and $490,000, respectively. In years 1-3, LCM extracted 18,050 tons of coal as follows: (1) Tons of Coal 17,050 Depletion Tons Extracted per Year Year 2 (2) Basis (2)/(1) Rate $1,108,250 $65.00 9,400 Note: Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars. Year 1 Year 2 Year 3 Year 1 4,350 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? Depletion Expense Year 3 4,300
Last Chance Mine (LCM) purchased a coal deposit for $1,108,250. It estimated it would extract 17,050 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.28 million, $6.7 million, and $5.1 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 ($21,000), $685,000, and $490,000, respectively. In years 1-3, LCM extracted 18,050 tons of coal as follows: (1) Tons of Coal 17,050 Depletion Tons Extracted per Year Year 2 (2) Basis (2)/(1) Rate $1,108,250 $65.00 9,400 Note: Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars. Year 1 Year 2 Year 3 Year 1 4,350 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? Depletion Expense Year 3 4,300
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Problem 10-75 (LO 10-5) (Algo)
[The following information applies to the questions displayed below.]
Last Chance Mine (LCM) purchased a coal deposit for $1,108,250. It estimated it would extract 17,050 tons of coal from the
deposit. LCM mined the coal and sold it, reporting gross receipts of $1.28 million, $6.7 million, and $5.1 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
($21,000), $685,000, and $490,000, respectively. In years 1-3, LCM extracted 18,050 tons of coal as follows:
(1) Tons of
Coal
17,050
Depletion
(2) Basis (2)/(1) Rate Year 1.
$1,108,250
$65.00
4,350
Year 3
4,300
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)
Tons Extracted per Year
Year 2
9,400
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
Year 2
Year 3
Depletion
Expense](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F344e5796-d304-4889-a0e0-06ab7f23b967%2Feaaa763b-3cbb-4e76-a74a-f5be33a72b5f%2F3lmm42d_processed.jpeg&w=3840&q=75)
Transcribed Image Text:!
Required information
Problem 10-75 (LO 10-5) (Algo)
[The following information applies to the questions displayed below.]
Last Chance Mine (LCM) purchased a coal deposit for $1,108,250. It estimated it would extract 17,050 tons of coal from the
deposit. LCM mined the coal and sold it, reporting gross receipts of $1.28 million, $6.7 million, and $5.1 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
($21,000), $685,000, and $490,000, respectively. In years 1-3, LCM extracted 18,050 tons of coal as follows:
(1) Tons of
Coal
17,050
Depletion
(2) Basis (2)/(1) Rate Year 1.
$1,108,250
$65.00
4,350
Year 3
4,300
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)
Tons Extracted per Year
Year 2
9,400
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
Year 2
Year 3
Depletion
Expense
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