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 $1,223,950. 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. years 1-3, LCM extracted 14,450 tons of coal as follows: (1) Tons of Coal 13,450 Depletion Tons Extracted per Year (2) Basis (2)/(1) Rate $1,223,950 $91.00 Year 1 2,250 Year 2 7,700 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? Year 1 Year 2 Year 3 Year 3 4,500 Depletion Expense
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 $1,223,950. 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. years 1-3, LCM extracted 14,450 tons of coal as follows: (1) Tons of Coal 13,450 Depletion Tons Extracted per Year (2) Basis (2)/(1) Rate $1,223,950 $91.00 Year 1 2,250 Year 2 7,700 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? Year 1 Year 2 Year 3 Year 3 4,500 Depletion Expense
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 $1,223,950. 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. years 1-3, LCM extracted 14,450 tons of coal as follows:
(1) Tons of
Coal
13,450
Depletion
Tons Extracted per Year
(2) Basis (2)/(1) Rate
$1,223,950
$91.00
Year 1
2,250
Year 2
7,700
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?
Year 1
Year 2
Year 3
Year 3
4,500
Depletion
Expense](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F53f0d767-1729-4fa4-8707-675d9763ffa6%2F532a72a3-24b1-4a4e-9ea7-d1effa3818b3%2F5112fu3j_processed.png&w=3840&q=75)
Transcribed Image Text: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 $1,223,950. 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. years 1-3, LCM extracted 14,450 tons of coal as follows:
(1) Tons of
Coal
13,450
Depletion
Tons Extracted per Year
(2) Basis (2)/(1) Rate
$1,223,950
$91.00
Year 1
2,250
Year 2
7,700
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?
Year 1
Year 2
Year 3
Year 3
4,500
Depletion
Expense
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