At the beginning of the current year, JKL 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, the entity 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. The entity believed that it will be able to sell the property afterwards for P3,000,000. During the current year, the entity incurred P3,600,000 of development cost preparing the mine for production, removed 80,000 tons of ore and sold 60,000 tons. Determine the total amount of depletion should be recorded for the current year. 1,920,000 b. 1,440,000 c. 1,940,000 d. 1,455,000

At the beginning of the current year, JKL 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, the entity 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. The entity believed that it will be able to sell the property afterwards for P3,000,000. During the current year, the entity incurred P3,600,000 of development cost preparing the mine for production, removed 80,000 tons of ore and sold 60,000 tons. Determine the total amount of depletion should be recorded for the current year. 1,920,000 b. 1,440,000 c. 1,940,000 d. 1,455,000

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 11EA: The following intangible assets were purchased by Goldstein Corporation: A. A patent with a...

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The following intangible assets were purchased by Goldstein Corporation: A. A patent with a remaining legal life of twelve years is bought, and Goldstein expects to be able to use it for seven years. B. A copyright with a remaining life of thirty years is purchased, and Goldstein expects to be able to use it for ten years. For each of these situations, determine the useful life over which Goldstein will amortize the intangible assets.
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?
On January 1, 2022, Annie Company purchased a mineral mine for P26,400,000 with removable ore estimated at 1,200,000 tons. After it has all the ore, the entity will be required by law to restore the land to its original condition at an estimated cost of P2,200,000. The present value of the estimated restoration cost is P1,800,000. The property can be sold afterwards for P3,000,000. During 2021, the entity incurred P2,000,000 exploration cost and P1,600,000 development cost preparing the mine for production. The entity removed 80,000 tons of ore and sold 60,000 tons of ore in 2022. What amount of depletion should be included in the cost of sales for 2022? А. 1,920,000 B. 1,440,000 С. 1,500,000 D. 1,590,000
On January 1, 2020, Hilary 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, the entity will be required by law to restore the land to the original condition at an estimated cost of P2,200,000. The present value of the estimated restoration cost is P1,800,000. The property can be sold afterwards for P3,000,000. During 2020, the entity incurred P2,000,000 exploration cost and P1,600,000 development cost preparing the mine for productions. The entity removed 80,000 tons of ore and sold 60,000 tons of ore in the current year. What amount of depletion should be included in cost of sales for the current year? 1,920,000 1,440,000 1,455,000 1,940,000 What is the depletion for the current year? 1,920,000 1,440,000 1,940,000 1,455,000
On January 1, 2021, Annie 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, the entity will be required by law to restore the land to its original condition at an estimated cost of P2,200,000. The present value of the estimated restoration cost is P1,800,000. The property can be sold afterwards for P3,000,000. During 2021, the entity incurred P2,000,000 exploration cost and P1,600,000 development cost preparing the mine for production. The entity removed 80,000 tons of ore and sold 60,000 tons of ore in 2021. What amount of depletion should be included in cost of sales for 2021?
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