How much should be the carrying amount of the wasting assets at December 31 of next year? EACHERS%20day/jrm/NEW%20CURRICULUM/121%20AE/01%20lntermediate%20Acctg%202020%20Vol%201%20Conrado%20T%2Problem 28-11 (AICPA Adapted)On Julx 1, Lethargic Company, a calendar year entity,purchased the rights to a mine. The total purchase price wasP14,000,000, of which P2,000,000 was allocable to the land.Estimated reserves were 1,500,000 tons. The entity expects toextract and sell 25,000 tons per month.The entity purchased new equipment on July 1. Theequipment was purchased for P8,000,000 and had a usefullife of 4 years with no residual value.1. What is the depletion for the current year?a. 1,200,000b. 2,400,000c. 1,950,000d. 1,400,0002. What is the depreciation of the equipment for the currentyear?IX E

Depletion refers to the allocation or expense of extracting natural resources from the surface of…

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How much should be the carrying amount of the wasting assets at December 31 of next year?

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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Question

How much should be the carrying amount of the wasting assets at December 31 of next year?

EACHERS%20day/jrm/NEW%20CURRICULUM/121%20AE/01%20lntermediate%20Acctg%202020%20Vol%201%20Conrado%20T%2
Problem 28-11 (AICPA Adapted)
On Julx 1, Lethargic Company, a calendar year entity,
purchased the rights to a mine. The total purchase price was
P14,000,000, of which P2,000,000 was allocable to the land.
Estimated reserves were 1,500,000 tons. The entity expects to
extract and sell 25,000 tons per month.
The entity purchased new equipment on July 1. The
equipment was purchased for P8,000,000 and had a useful
life of 4 years with no residual value.
1. What is the depletion for the current year?
a. 1,200,000
b. 2,400,000
c. 1,950,000
d. 1,400,000
2. What is the depreciation of the equipment for the current
year?
IX E

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