OH Corporation in 2017 paid ₱24,096,560 for a property with natural resources estimated at 1,025,600 tons. The property was estimated to be worth ₱2,200,000 after removal of natural resources. Development costs of ₱11,025,200 were incurred in 2018 before withdrawals or extractions could be made. In 2019, resources removed totaled 150,000 tons. In 2020, additional development costs of ₱8,400,000 were incurred and resources are estimated to be 1,500,000 tons at the beginning of 2020. Resources extracted in 2020 totaled 175,000 tons. 1. What is the depletion expense for the year 2020? 2. What is the carrying value of the wasting asset as of December 31, 2020?
OH Corporation in 2017 paid ₱24,096,560 for a property with natural resources estimated at 1,025,600 tons. The property was estimated to be worth ₱2,200,000 after removal of natural resources. Development costs of ₱11,025,200 were incurred in 2018 before withdrawals or extractions could be made. In 2019, resources removed totaled 150,000 tons. In 2020, additional development costs of ₱8,400,000 were incurred and resources are estimated to be 1,500,000 tons at the beginning of 2020. Resources extracted in 2020 totaled 175,000 tons. 1. What is the depletion expense for the year 2020? 2. What is the carrying value of the wasting asset as of December 31, 2020?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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OH Corporation in 2017 paid ₱24,096,560 for a property with natural resources estimated at 1,025,600 tons. The property was estimated to be worth ₱2,200,000 after removal of natural resources. Development costs of ₱11,025,200 were incurred in 2018 before withdrawals or extractions could be made. In 2019, resources removed totaled 150,000 tons. In 2020, additional development costs of ₱8,400,000 were incurred and resources are estimated to be 1,500,000 tons at the beginning of 2020. Resources extracted in 2020 totaled 175,000 tons.
1. What is the depletion expense for the year 2020?
2. What is the carrying value of the wasting asset as of December 31, 2020?
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