Determine the depletion charges using the percentage depletion method for the first year only for a coal mine. The applicable rate for the percentage depletion method is 10%. Cost to acquire mine rights = $50,000
Estimated mine size = 10,000 Tons
Selling price = $80 per Ton
Amount sold in year 1 = 2,000 Tons
Operating cost in year 1 = $100,000