Under the depletion allowance method in computing depreciation, the depletion charge is equal to either ________________ which ever is smaller ?

A. Fixed percentage of gross income or the net taxable income
B. Fixed percentage of gross income or 50% of the net taxable income
C. 50% of the fixed percentage of gross income or 50% of the net taxable income
D. 50% of the fixed percentage of gross income or the net taxable income

Correct Answer: Fixed percentage of gross income or 50% of the net taxable income ✔

Last Updated: January 22, 2019