Depletion (PFRS 6) Problem 15. MINER Inc. acquired a mining right from the national government to extract nickel from Mt. Makulot in exchange for 100,000 ordinary shares with par value of P30 and fair value of P40 per share. The company incurred P2,000,000 exploration costs regarding the determination of the nickel reserves. The national government requires the company to restore the mine at an estimated cost of P1,000,000. Before starting extracting the nickel from the mine, MINER Inc. incurred a total development cost of P7,000,000 consisting of a building with a cost of P2,000,000 and useful life of 8 years. The balance of the development cost pertains to those costs incurred for grading, leveling and filling the mine. The estimated residual value of the mine is P2,000,000 while the building is P500,000. The mining company started extracting nickel reserves on January 1, 2015 with the following date of extraction for 4 years of operation: Extracted Nickel during the year Estimated remaining nickel reserves after extraction 600,000 500,000 300,000 50,000 Year of Extraction 400,000 2015 2016 2017 100,000 150,000 2018 MINER Inc. capitalized the depletion and depreciation as part of the cost of its inventory. It started selling its inventory on year 2015. As of December 31, 2018, the ending inventory has a cost of P10,000,000, inclusive of P1,000,000 depletion and P200,000 depreciation. As of the same date, the unrestricted retained earnings has a balance of P5,000,000. From years 2015 – 2017, MINER Inc. has declared P2,000,000 dividends from its contributed capital. Required: Based on the result of your audit, determine the following: a. Depletion for the year ended December 31, 2015 b. Depreciation for the year ended December 31, 2016 c. Carrying value of building as of December 31, 2017 d. Carrying value of wasting asset as of December 31, 2018 e. Maximum dividends that can be declared by Mining Company on December 31, 2018