a. How much is the depletion charge in 2022? b. Assuming that of the 300,000 ounces of gold extracted in 2022, 280,000 ounces were sold and 20,000 ounces remain in inventory. How much depletion is recognized in the 2022 (a) statement of financial position and (b) statement of profit or loss and other comprehensive income, respectively?
In 2021, XYZ Mining Corp. acquired the right to use 1,000 acres of land to mine for gold. The lease cost is ₱200,000,000, and the related exploration costs on the property amounted to ₱40,000,000. It is the policy of XYZ Mining Corp. to capitalize all costs of exploration and evaluation of mineral resources. Intangible development costs of drilling, tunnels, shafts, and wells incurred before opening the mine amounted to ₱340,00,000. At the end of the mine’s economic useful life, XYZ Mining Corp. is required by legislation to restore the site. Estimated restoration costs have a fair value of ₱20,000,000. XYZ Mining Corp. estimates that the mine will provide approximately 100,000,000 ounces of gold. Actual ounce of gold mined in 2022 totaled 300,000 ounces.
a. How much is the depletion charge in 2022?
b. Assuming that of the 300,000 ounces of gold extracted in 2022,
280,000 ounces were sold and 20,000 ounces remain in inventory. How much depletion is recognized in the 2022 (a)
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