On January 1, 2022, Annie Company purchased a mineral mine for P26,400,000 with removable ore estimated at 1,200,000 tons. After it has all the ore, the entity will be required by law to restore the land to its original condition at an estimated cost of P2,200,000. The present value of the estimated restoration cost is P1,800,000. The property can be sold afterwards for P3,000,000. During 2021, the entity incurred P2,000,000 exploration cost and P1,600,000 development cost preparing the mine for production. The entity removed 80,000 tons of ore and sold 60,000 tons of ore in 2022. What amount of depletion should be included in the cost of sales for 2022? A. 1,920,000 B. 1,440,000 C. 1,500,000 D. 1,590,000

On January 1, 2022, Annie Company purchased a mineral mine for P26,400,000 with removable ore estimated at 1,200,000 tons. After it has all the ore, the entity will be required by law to restore the land to its original condition at an estimated cost of P2,200,000. The present value of the estimated restoration cost is P1,800,000. The property can be sold afterwards for P3,000,000. During 2021, the entity incurred P2,000,000 exploration cost and P1,600,000 development cost preparing the mine for production. The entity removed 80,000 tons of ore and sold 60,000 tons of ore in 2022. What amount of depletion should be included in the cost of sales for 2022? A. 1,920,000 B. 1,440,000 C. 1,500,000 D. 1,590,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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