PC Mine Purchased a Platinum Deposit for $3,500,000

question 103

Essay

PC Mine purchased a platinum deposit for $3,500,000. It estimated it would extract 17,000 ounces of platinum from the deposit. PC mined the platinum and sold it reporting gross receipts of $500,000 and $8 million for years 1 and 2, respectively. During years 1 and 2, PC reported net income (loss) from the platinum deposit activity in the amount of ($100,000) and $3,800,000, respectively. In years 1 and 2, PC actually extracted 2,000 and 8,000 ounces of platinum. What is PC's depletion expense for years 1 and 2 if the applicable percentage depletion for platinum is 22 percent, rounded to the nearest whole number?

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Definitions:

Creative People

Individuals who have the ability to produce original and unusual ideas, or to make something new or imaginative.

Mechanistic Structure

An organizational configuration that emphasizes hierarchy, rigid departmentalization, a clear chain of command, and strict control, commonly found in highly formalized and centralized organizations.

Organic Structure

An organizational configuration characterized by flexibility, decentralized decision-making, and a lack of rigid procedures.

Innovative Ideas

Novel concepts or proposals that have the potential to bring about significant changes or improvements in a specific field.