Required information For the last 10 years, Am-Mex Coal has used the cost depletion factor of $2,500 per 100 tons to write off the investment of $38 million in its Pennsylvania anthracite coal mine. Depletion thus far totals $24.8 million. A new study to appraise mine reserves indicates that no more than 910,000 tons of salable coal remains. The estimated gross income is expected to be $8.8 million on a production level of 72,000 tons. NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. Determine next year's depletion amount. The percentage depletion allowance is 10%. (Enter your answer in dollars and not in millions.)
Required information For the last 10 years, Am-Mex Coal has used the cost depletion factor of $2,500 per 100 tons to write off the investment of $38 million in its Pennsylvania anthracite coal mine. Depletion thus far totals $24.8 million. A new study to appraise mine reserves indicates that no more than 910,000 tons of salable coal remains. The estimated gross income is expected to be $8.8 million on a production level of 72,000 tons. NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. Determine next year's depletion amount. The percentage depletion allowance is 10%. (Enter your answer in dollars and not in millions.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Required information
For the last 10 years, Am-Mex Coal has used the cost depletion factor of $2,500 per 100
tons to write off the investment of $38 million in its Pennsylvania anthracite coal mine.
Depletion thus far totals $24.8 million. A new study to appraise mine reserves indicates
that no more than 910,000 tons of salable coal remains. The estimated gross income is
expected to be $8.8 million on a production level of 72,000 tons.
NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to
return to this part.
Determine next year's depletion amount. The percentage depletion allowance is 10%. (Enter your answer
in dollars and not in millions.)
The next year's depletion amount is $](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1491bc13-3e2d-435d-b1d5-53fb3c255476%2F221f412f-09b9-499e-89f1-d2fb716ad38a%2Fxdfu4tkdq_processed.png&w=3840&q=75)
Transcribed Image Text:!
Required information
For the last 10 years, Am-Mex Coal has used the cost depletion factor of $2,500 per 100
tons to write off the investment of $38 million in its Pennsylvania anthracite coal mine.
Depletion thus far totals $24.8 million. A new study to appraise mine reserves indicates
that no more than 910,000 tons of salable coal remains. The estimated gross income is
expected to be $8.8 million on a production level of 72,000 tons.
NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to
return to this part.
Determine next year's depletion amount. The percentage depletion allowance is 10%. (Enter your answer
in dollars and not in millions.)
The next year's depletion amount is $
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