In 2020, Julie Co purchased a property with the mineral deposit for P30,000,000. The property had a residual value of P4,000,000. However, Julie is legally required to restore the property to its original condition at a discounted amount of P1,000,000. In 2020, Julie spent P2,000,000 in the development cost and P5,000,000 in building on the property. Julie does not anticipate that the building will have utility after the mineral deposits are removed. In 2021, an amount of P3,000,000 was spent for additional development on the mine. Tons extracted totaled 2,000,000 in 2020 and 1,500,000 in 2021. Tons remaining totaled 3,000,000 on December 31, 2020, and 2,500,000 on December 31,2021. What is the depletion for 2021? a. 7,650,000 b. 8,775,000 c. 8,700,000 d. 7,200,000
In 2020, Julie Co purchased a property with the mineral deposit for P30,000,000. The property had a residual value of P4,000,000. However, Julie is legally required to restore the property to its original condition at a discounted amount of P1,000,000. In 2020, Julie spent P2,000,000 in the development cost and P5,000,000 in building on the property. Julie does not anticipate that the building will have utility after the mineral deposits are removed. In 2021, an amount of P3,000,000 was spent for additional development on the mine. Tons extracted totaled 2,000,000 in 2020 and 1,500,000 in 2021. Tons remaining totaled 3,000,000 on December 31, 2020, and 2,500,000 on December 31,2021. What is the depletion for 2021?
a. 7,650,000
b. 8,775,000
c. 8,700,000
d. 7,200,000
Step by step
Solved in 2 steps
