In 2010, Massachusetts Mining Purchased a Mineral Deposit for $36,000,000

question 202

Essay

In 2010, Massachusetts Mining purchased a mineral deposit for $36,000,000. It is estimated that 15,000,000 tons can be extracted from the mine. Calculate depletion expense during 2010 when 800,000 tons were extracted and sold.

---

Definitions:

Interperiod Tax Allocation

The process of distributing income tax expenses or benefits over different accounting periods because of temporary differences that cause deferred tax amounts.

Intraperiod Tax Allocation

The allocation of income tax expense or benefit among various components of comprehensive income, net income, and other directly related statements within a single period.

Current Taxes Payable

This refers to the amount of taxes a company is obligated to pay to the government within the current fiscal year, not yet paid.

IRS

The Internal Revenue Service, a U.S. government agency responsible for the collection of taxes and enforcement of tax laws.