A 75,000-ton limestone quarry cost $2,000,000 to develop. Annual gross income for the quarry in years 1 through 5 is estimated at $1,000,000. The annual production level during years 1-5 is estimated to be 10,000 tons. The percentage depletion allowance for limestone is 5%. Assume that depletion charges do not exceed 50% of taxable income. Find the estimated depletion for year 5 based on the percentage depletion method and the cost depletion method (state the depletion factor pt as part of your solution in $ per ton).

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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A 75,000-ton limestone quarry cost $2,000,000 to develop. Annual gross income for the quarry in years 1 through 5 is estimated at $1,000,000. The annual production level during years 1-5 is estimated to be 10,000 tons. The percentage depletion allowance for limestone is 5%. Assume that depletion charges do not exceed 50% of taxable income. Find the estimated depletion for year 5 based on the percentage depletion method and the cost depletion method (state the depletion factor pas part of your solution in $ per ton).

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