On January 15, 2017, Vern purchased the rights to a mineral interest for $3,500,000. At that time it was estimated that the recoverable units would be 500,000. During the year, 40,000 units were mined and 25,000 units were sold for $800,000. Vern incurred expenses during 2017 of $500,000. The percentage depletion rate is 22%. Determine Vern's depletion deduction for 2017.
A)$150,000
B)$175,000
C)$176,000
D)$200,000
E)$250,000

Question

Quizplus · Accepted Answer

The Answer of On January 15, 2017, Vern purchased the rights to a mineral interest for $3,500,000. At that time it was estimated that the recoverable units would be 500,000. During the year, 40,000 units were mined and 25,000 units were sold for $800,000. Vern incurred expenses during 2017 of $500,000. The percentage depletion rate is 22%. Determine Vern's depletion deduction for 2017.
A)$150,000
B)$175,000
C)$176,000
D)$200,000
E)$250,000

On January 15, 2017, Vern Purchased the Rights to a Mineral