Concorde Corporation purchased a coal mine for $2,000,000. It estimates the mine contains at least 800,000 tons of coal. In year 1, it mines and sells 40,000 tons. At the end of the year, it revises the estimates of the tons of coal available for mining to 600,000. In year 2 it sells the 60,000 of 75,000 tons mined in year 2. Determine Concorde's depletion deduction in years 1 and 2.

Question

Quizplus · Accepted Answer

The Answer of Concorde Corporation purchased a coal mine for $2,000,000. It estimates the mine contains at least 800,000 tons of coal. In year 1, it mines and sells 40,000 tons. At the end of the year, it revises the estimates of the tons of coal available for mining to 600,000. In year 2 it sells the 60,000 of 75,000 tons mined in year 2. Determine Concorde's depletion deduction in years 1 and 2.

Concorde Corporation Purchased a Coal Mine for $2,000,000