ABC Corp., embarked a new venture in DEF Corporation in 2022. It expects to gleam 2,000,000 ounces of a precious ore from its holdings there, over several years. Relevant data follow:Cost of the mineral rights, P 500,000Exploration cost, 2022 (1/3 successful). P 1,500,000Extraction cost, 2022, P 2,000.000Ore extracted, 2022 (500,000 oz.)Ore sold, 2022 (300,000 oz.)What is depletion for 2022, using the full cost method of accounting for exploration costs?P 250,000P 150,000P 500,000P 1,000,000

In mining there are depletion methods used for the depreciation calculating and depreciation are…

Answered: ABC Corp., embarked a new venture in…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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ABC Corp., embarked a new venture in DEF Corporation in 2022. It expects to gleam 2,000,000 ounces of a precious ore from its holdings there, over several years. Relevant data follow:

Cost of the mineral rights, P 500,000
Exploration cost, 2022 (1/3 successful). P 1,500,000
Extraction cost, 2022, P 2,000.000
Ore extracted, 2022 (500,000 oz.)
Ore sold, 2022 (300,000 oz.)

What is depletion for 2022, using the full cost method of accounting for exploration costs?

P 250,000
P 150,000
P 500,000
P 1,000,000

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