In 2017, OBSTREPEROUS NOISY Mining Corp. acquired the right to use 1,000 acres of land to mine for gold. The lease cost is P200,000,000, and the related exploration costs on the property amounted to P40,000,000. It is the policy of OBSTREPEROUS Mining Corp. to capitalize all costs of exploration and evaluation of mineral resources. Intangible development costs for drilling, tunnels, shafts, and wells incurred before opening the mine amounted to P340,00,000. At the end of the mine's economic useful life, OBSTREPEROUS Mining Corp. is required by legislation to restore the site. Estimated restoration costs have a fair value of P20,000,000. OBSTREPEROUS Mining Corp. estimates that the mine will provide approximately 100,000,000 ounces of gold. Actual ounce of gold mined in 2018 totaled 300,000 ounces. How much is the depletion charge in 2018?
In 2017, OBSTREPEROUS NOISY Mining Corp. acquired the right to use 1,000 acres of land to mine for gold. The lease cost is P200,000,000, and the related exploration costs on the property amounted to P40,000,000. It is the policy of OBSTREPEROUS Mining Corp. to capitalize all costs of exploration and evaluation of mineral resources. Intangible development costs for drilling, tunnels, shafts, and wells incurred before opening the mine amounted to P340,00,000. At the end of the mine's economic useful life, OBSTREPEROUS Mining Corp. is required by legislation to restore the site. Estimated restoration costs have a fair value of P20,000,000. OBSTREPEROUS Mining Corp. estimates that the mine will provide approximately 100,000,000 ounces of gold. Actual ounce of gold mined in 2018 totaled 300,000 ounces. How much is the depletion charge in 2018?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The answer for this is 1,800,000 how to get this amount? Please show the solution.
Transcribed Image Text:In 2017, OBSTREPEROUS NOISY Mining Corp. acquired the
right to use 1,000 acres of land to mine for gold. The lease cost is
P200,000,000, and the related exploration costs on the property
amounted to P40,000,000. It is the policy of OBSTREPEROUS
Mining Corp. to capitalize all costs of exploration and evaluation of
mineral resources. Intangible development costs for drilling,
tunnels, shafts, and wells incurred before opening the mine
amounted to P340,00,000. At the end of the mine's economic useful
life, OBSTREPEROUS Mining Corp. is required by legislation to
restore the site. Estimated restoration costs have a fair value of
P20,000,000. OBSTREPEROUS Mining Corp. estimates that the
mine will provide approximately 100,000,000 ounces of gold.
Actual ounce of gold mined in 2018 totaled 300,000 ounces.
How much is the depletion charge in 2018?
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