On January 2020, Mina Company paid the national government a fee in the amount of P129,000,000 for an area of interest with removable ore estimated by geological surveys at 10,000,000 tons. Mina is required by the national government to restore the area of interest after the extraction of theestimated units of reserves, Mina Company estimates that it will take 10 years to fully extract thereserves and estimates its restoration cost to be P10,000,000. The relevant discount rate is 10% (use 3 decimal places to round off the present value factor). The Company also incurred P2,150,000 of development costs in preparing the property for theextraction of the ore. During 2020, 540,000 tons were mined. How much is the depletion/amortization expense for the year ended December 31, 2020?
On January 2020, Mina Company paid the national government a fee in the amount of P129,000,000 for an area of interest with removable ore estimated by geological surveys at 10,000,000 tons. Mina is required by the national government to restore the area of interest after the extraction of theestimated units of reserves, Mina Company estimates that it will take 10 years to fully extract thereserves and estimates its restoration cost to be P10,000,000. The relevant discount rate is 10% (use 3 decimal places to round off the present value factor).
The Company also incurred P2,150,000 of development costs in preparing the property for theextraction of the ore. During 2020, 540,000 tons were mined.
How much is the depletion/amortization expense for the year ended December 31, 2020?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
