In January 2018, HUKAY Mining Corporation purchased a mineral mine for P7,200,000 with removable ore estimated by geological surveys at 4,320,000 tons. The property has an estimated value of P720,000 after the ore has been extracted. HUKAY incurred P2,160,000 of development costs preparing the property for the extraction of ore. During 2018, 540,000 tons were removed and 480,000 tons were sold. For the year ended December 31, 2018, HUKAY included P960,000 of depletion in its cost of goods sold. What should be the amount of depletion to be included in the cost of goods sold?
In January 2018, HUKAY Mining Corporation purchased a mineral mine for P7,200,000 with removable ore estimated by geological surveys at 4,320,000 tons. The property has an estimated value of P720,000 after the ore has been extracted. HUKAY incurred P2,160,000 of development costs preparing the property for the extraction of ore. During 2018, 540,000 tons were removed and 480,000 tons were sold. For the year ended December 31, 2018, HUKAY included P960,000 of depletion in its cost of goods sold. What should be the amount of depletion to be included in the cost of goods sold?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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In January 2018, HUKAY Mining Corporation purchased a mineral mine for P7,200,000 with removable ore estimated by geological surveys at 4,320,000 tons. The property has an estimated value of P720,000 after the ore has been extracted. HUKAY incurred P2,160,000 of development costs preparing the property for the extraction of ore. During 2018, 540,000 tons were removed and 480,000 tons were sold. For the year ended December 31, 2018, HUKAY included P960,000 of depletion in its cost of goods sold.
What should be the amount of depletion to be included in the cost of goods sold?
Answer in figures, ignore peso sign.
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