(Adapted) 5. Joseph Company acquired a tract of land containing an extractable natural resource. Joseph is required by the purchase contract to restore the land to a condition suitable for recreational use after it has extracted the natural resource Geological surveys estimate that the recoverable reserves will be 2,500,000 tons and that the land will have a value of P1,000,000 after restoration. Relevant cost information follows: Land P9,000,000 Present value of estimated restoration costs 1,500,000 What should be the depletion charge per ton of extracted material? a. Р4.00 (Adapted) •b. P3.80 с. Р3.60 d. P3.20

(Adapted) 5. Joseph Company acquired a tract of land containing an extractable natural resource. Joseph is required by the purchase contract to restore the land to a condition suitable for recreational use after it has extracted the natural resource Geological surveys estimate that the recoverable reserves will be 2,500,000 tons and that the land will have a value of P1,000,000 after restoration. Relevant cost information follows: Land P9,000,000 Present value of estimated restoration costs 1,500,000 What should be the depletion charge per ton of extracted material? a. Р4.00 (Adapted) •b. P3.80 с. Р3.60 d. P3.20

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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