Lucky Strike Mine (LLC) purchased a silver deposit for $1,500,000. It estimated it would extract 500,000 ounces of silver from the deposit. Lucky Strike mined the silver and sold it, reporting gross receipts of $1.8 million, $2.5 million, and $2 million for Years 1 through 3, respectively. During Years 1 through 3, Lucky Strike reported net income (loss) from the silver deposit activity in the amount of ($100,000), $400,000, and $100,000, respectively. In Years 1 through 3, Lucky Strike actually extracted 300,000 ounces of silver as follows:Ounces extracted per yearYear 1Year 2Year 350,000150,000100,000What is Lucky Strike's depletion deduction for Year 2 if the applicable percentage depletion for silver is 15 percent?
A. $375,000.
B. $400,000.
C. $450,000.
D. $200,000.
E. None of the choices are correct.
Answer: C
You might also like to view...
When Johnson & Johnson's ads popped up on brokers' Web sites whenever the stock market fell by 100 points or more, it was an example of an interstitial
Indicate whether the statement is true or false
The effectiveness of product strategies depends on the managers who carry them out
Indicate whether the statement is true or false
Considering nonfinancial and financial goals, we can say
A) nonfinancial goals have no connection to financial goals. B) the most important financial goal is often considered financial independence. C) the most important financial goal is increasing our rate of savings. D) setting goals is unrealistic in a changing economic environment.
Why do trade unions seek to erect barriers to globalization?
a. To ensure that the price of labour in the labour market is not reduced by people from less developed countries who will enable employers to cut labour costs b. To ensure that domestic employees won’t leave the domestic market and thus weaken the employee base of the economy c. To ensure that employers who benefit from globalization also share the profits with employees d. All of the above