Compute the annual depletion on a percentage basis

Reference no: EM132165529

Question - Western Carolina Coal Co. expects to produce 125,000 tons of coal annually for 15 years. The deposit cost $3M to acquire; the annual gross revenues are expected to be $9.50 per ton, and the net revenues are expected to be $4.25 per ton.

(a) Compute the annual depletion on a cost basis.

(b) Compute the annual depletion on a percentage basis.

Reference no: EM132165529

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