In 20x1, ABC Mining Corp. acquired the right to use 1,000 acres of land to mine for gold. Thelease cost is ₱50,000,000, and the related exploration costs on the property amounted to₱10,000,000. It is the policy of ABC Mining Corp. to capitalize all costs of exploration andevaluation of mineral resources. Intangible development costs for drilling, tunnels, shafts, andwells incurred before opening the mine amounted to ₱85,000,000. At the end of the mine’seconomic useful life, ABC Mining Corp. is required by legislation to restore the site. Estimatedrestoration costs have a fair value of ₱5,000,000. ABC Mining Corp. estimates that the mine willprovide approximately 100,000,000 ounces of gold. ABC extracted 300,000 ounces of gold in20x2. How much is the depletion charge in 20x2? a. 450,000 b. 480,000 c. 360,000 d. 460,000
In 20x1, ABC Mining Corp. acquired the right to use 1,000 acres of land to mine for gold. Thelease cost is ₱50,000,000, and the related exploration costs on the property amounted to₱10,000,000. It is the policy of ABC Mining Corp. to capitalize all costs of exploration andevaluation of mineral resources. Intangible development costs for drilling, tunnels, shafts, andwells incurred before opening the mine amounted to ₱85,000,000. At the end of the mine’seconomic useful life, ABC Mining Corp. is required by legislation to restore the site. Estimatedrestoration costs have a fair value of ₱5,000,000. ABC Mining Corp. estimates that the mine willprovide approximately 100,000,000 ounces of gold. ABC extracted 300,000 ounces of gold in20x2. How much is the depletion charge in 20x2?
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