Question

A Central Appalachia 12,500 Btu, 1.2 SO2 coal has an average price of $60 per ton....

A Central Appalachia 12,500 Btu, 1.2 SO2 coal has an average price of $60 per ton. A mine having 7 million tons of coal has a first cost of $42 million. The cost of mining is $45 per ton. If, during the first 3 years of operation, the mine yields 300,000, 600,000, and 500,000 tons, respectively, determine the depletion allowance using the better method of depletion for each year.

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