A zinc mine in Patagonia, Arizona with an estimated deposit…
A zinc mine in Patagonia, Arizona with an estimated deposit of 20,800,000 lbs of zinc has a basis of $2,000,000. The mine is projected to have a 32-year life. Production and financial information for the first four years are given below. Year Extracted Zinc (lbs) Sales ($) Taxable Income ($) 1 34,500 42,400 26,500 2 122,100 112,700 56,600 3 183,700 174,400 89,900 4 244,200 197,800 85,400 (Round dollar answers to nearest dollar.) Determine the percentage depletion amount for Year 3. $[p3] Determine the cost depletion amount for Year 3. $[c3] Which depletion charge should the company take for Year 3? [t3] (enter P for percentage, or C for cost)
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