In January, Arco Company purchases the rights to a natural resource for $3,000,000. fte estimated recoverable units from the natural resource amount to 3,000,000 units. During the year, Arco sold 100,000 units of the natural resource at $6 per unit and incurred operating costs other than depletion of $4.50 per unit. Assume a 15 percent speciﬁed depletion percentage. Based on these facts, compute the company's depletion deduction using both cost depletion and percentage depletion and choosing the higher ﬁgure.

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The Answer of In January, Arco Company purchases the rights to a natural resource for $3,000,000. fte estimated recoverable units from the natural resource amount to 3,000,000 units. During the year, Arco sold 100,000 units of the natural resource at $6 per unit and incurred operating costs other than depletion of $4.50 per unit. Assume a 15 percent speciﬁed depletion percentage. Based on these facts, compute the company's depletion deduction using both cost depletion and percentage depletion and choosing the higher ﬁgure.

In January, Arco Company Purchases the Rights to a Natural