A certain mining company in Masbate has the 5 years record of its natural deposit extraction, 250,000 tons for the 1st year, 320,000 tons for the 2nd year, 360,000 tons for the 3rd year, 300,000 and 280,000 tons for the 4th and 5th year, respectively. The estimated natural deposit is about 5,000,000 tons and the company's initial cost is 120,000,000 million pesos. If the company had a gross income of 2,200 pesos per ton for the first 2 years, then 3,000 pesos per ton for the last 3 years. Determine: a.) The depletion charge for each year using the larger values for the 2 methods and b.) The percentage of the initial cost that has been written off in the 5 years.
A certain mining company in Masbate has the 5 years record of its natural deposit extraction, 250,000 tons for the 1st year, 320,000 tons for the 2nd year, 360,000 tons for the 3rd year, 300,000 and 280,000 tons for the 4th and 5th year, respectively. The estimated natural deposit is about 5,000,000 tons and the company's initial cost is 120,000,000 million pesos. If the company had a gross income of 2,200 pesos per ton for the first 2 years, then 3,000 pesos per ton for the last 3 years. Determine: a.) The depletion charge for each year using the larger values for the 2 methods and b.) The percentage of the initial cost that has been written off in the 5 years.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A certain mining company in Masbate has the 5 years record of its natural deposit extraction, 250,000 tons for the 1st year, 320,000 tons for the 2nd year, 360,000 tons for the 3rd year, 300,000 and 280,000 tons for the 4th and 5th year, respectively. The estimated natural deposit is about 5,000,000 tons and the company's initial cost is 120,000,000 million pesos. If the company had a gross income of 2,200 pesos per ton for the first 2 years, then 3,000 pesos per ton for the last 3 years. Determine:
a.) The depletion charge for each year using the larger values for the 2 methods and
b.) The percentage of the initial cost that has been written off in the 5 years.
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