Gomez Corporation purchased land for P 6,000,000. The company expected to extract 1,000,000 tons of mine from this land over the next 20 years at which time, the residual value will be zero. During the first 2 years of the mine’s operations,30,000 tons were mined each year and sold for P 80 per ton. The estimate of the total lifetime capacity of the mine was raise to 1,200,000 tons at the start of the 3rd year and the residual value was estimated to be P 480,000. During the third year, 50,000 tons were mined and sold for P 85 per ton. How much would be the depletion for the third year? a. 215,000 c. 225,000 b. 227,500 d. 235,000

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Gomez Corporation purchased land for P 6,000,000. The company expected to extract 1,000,000 tons of mine from this land over the next 20 years at which time, the residual value will be zero. During the first 2 years of the mine’s operations,30,000 tons were mined each year and sold for P 80 per ton. The estimate of the total lifetime capacity of the mine was raise to 1,200,000 tons at the start of the 3rd year and the residual value was estimated to be P 480,000. During the third year, 50,000 tons were mined and sold for P 85 per ton. How much would be the depletion for the third year? a. 215,000 c. 225,000 b. 227,500 d. 235,000
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