At the beginning of the current year, Bert Company purchased a mineral mine for P26,400,000 with removable ore estimated at 1,200,000 tons. After it has extracted all the ore, Bert will be required by law to restore the land to its original condition at an estimated cost of P2,100,000. The present value of the estimated restoration cost is P1,800,000. Bert believed that it will be able to sell the property afterwards for P3,000,000. During the current year, Bert incurred P3,600,000 of development cost preparing the mine for production, removed 80,000 tons of ore and sold 60,000 tons. What total amount of depletion should be recorded for the current year?
At the beginning of the current year, Bert Company purchased a mineral mine for P26,400,000 with removable ore estimated at 1,200,000 tons. After it has extracted all the ore, Bert will be required by law to restore the land to its original condition at an estimated cost of P2,100,000. The present value of the estimated restoration cost is P1,800,000. Bert believed that it will be able to sell the property afterwards for P3,000,000. During the current year, Bert incurred P3,600,000 of development cost preparing the mine for production, removed 80,000 tons of ore and sold 60,000 tons. What total amount of depletion should be recorded for the current year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:At the beginning of the current year, Bert Company purchased a mineral mine for P26,400,000 with
removable ore estimated at 1,200,000 tons. After it has extracted all the ore, Bert will be required by law
to restore the land to its original condition at an estimated cost of P2,100,000. The present value of the
estimated restoration cost is P1,800,000. Bert believed that it will be able to sell the property afterwards
for P3,000,000.
During the current year, Bert incurred P3,600,000 of development cost preparing the mine for production,
removed 80,000 tons of ore and sold 60,000 tons.
What total amount of depletion should be recorded for the current year?
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