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1. What is the allowable depletion charge using the percentage depletion method for year 1 only of the salt mine investment described below. The applicable rate for the percentage depletion method is 10%. Cost to acquire mine rights = $30,000

Estimated mine size = 2,000,000 pounds

Selling price = $0.18 per pound in year 1

Amount sold in year 1 = 700,000 pounds

Operating cost in year 1 = $104,000

2. A parcel of land in a coastal town was bought for $200,000 by Donald Crump in 2006 and a commercial building was built at a cost of $2M and opened for business in March 2007. The depreciation charge for the property in year 2007 is?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91673337

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