Wes acquired a mineral interest during the year for $10,000,000. A geological survey estimated that 250,000 tons of the mineral remained in the deposit. During the year, 80,000 tons were mined and 45,000 tons were sold for $12,000,000. Other related expenses amounted to $5,000,000. Assume the mineral depletion rate is 22%.

Calculate Wes's lowest taxable income, after any depletion deductions.

Lowest taxable income, after any depletion deductions=$4,360,000

Explanation:

Gross Income=$12,000,000

Expenses=$5,000,000

Income Before Depletion=Gross Income-Expenses

Income Before Depletion=$12,000,000-$5,000,000

Income Before Depletion=$7,000,000

Depletion Expense=Gross income*depletion Rate

Depletion expense=$12,000,000*0.22

Depletion expense=$2,640,000

Lowest taxable income, after any depletion deductions=Income Before Depletion-Depletion expense

Lowest taxable income, after any depletion deductions=$7,000,000-$2,640,000

Lowest taxable income, after any depletion deductions=$4,360,000

Your debits and credits will want to be written in your register. When you record transactions in your register, you are able to make sure you are balancing your check book and understand how much money you have coming in and where your money is going that you spend. Understanding expenses and how to manage your money is the best way to stay on track with monthly expenses and credits.