In 20x1, ABC Mining Corp. acquired the right to use 1,000 acres of land to mine for gold. The leasecost is ₱50,000,000, and the related exploration costs on the property amounted to ₱10,000,000. Itis the policy of ABC Mining Corp. to capitalize all costs of exploration and evaluation of mineralresources. Intangible development costs for drilling, tunnels, shafts, and wells incurred beforeopening the mine amounted to ₱85,000,000. At the end of the mine’s economic useful life, ABCMining Corp. is required by legislation to restore the site. Estimated restoration costs have a fairvalue of ₱5,000,000. ABC Mining Corp. estimates that the mine will provide approximately100,000,000 ounces of gold. ABC extracted 300,000 ounces of gold in 20x2. How much is thedepletion charge in 20x2?
In 20x1, ABC Mining Corp. acquired the right to use 1,000 acres of land to mine for gold. The leasecost is ₱50,000,000, and the related exploration costs on the property amounted to ₱10,000,000. Itis the policy of ABC Mining Corp. to capitalize all costs of exploration and evaluation of mineralresources. Intangible development costs for drilling, tunnels, shafts, and wells incurred beforeopening the mine amounted to ₱85,000,000. At the end of the mine’s economic useful life, ABCMining Corp. is required by legislation to restore the site. Estimated restoration costs have a fairvalue of ₱5,000,000. ABC Mining Corp. estimates that the mine will provide approximately100,000,000 ounces of gold. ABC extracted 300,000 ounces of gold in 20x2. How much is thedepletion charge in 20x2?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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In 20x1, ABC Mining Corp. acquired the right to use 1,000 acres of land to mine for gold. The leasecost is ₱50,000,000, and the related exploration costs on the property amounted to ₱10,000,000. Itis the policy of ABC Mining Corp. to capitalize all costs of exploration and evaluation of mineralresources. Intangible development costs for drilling, tunnels, shafts, and wells incurred beforeopening the mine amounted to ₱85,000,000. At the end of the mine’s economic useful life, ABCMining Corp. is required by legislation to restore the site. Estimated restoration costs have a fairvalue of ₱5,000,000. ABC Mining Corp. estimates that the mine will provide approximately100,000,000 ounces of gold. ABC extracted 300,000 ounces of gold in 20x2. How much is thedepletion charge in 20x2?
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