On July 1,2021, Phantom Corporation purchased the rights to a mine for a total purchase price of P10,000,000, of which P1,000,000 was allocable to the land. Reserves were estimated at 900,000 tons and the entity expects to extract and sell 15,000 tons per month. The entity also acquired new equipment on the same date for P5,000,000 and had a useful life of 6 years with no residual value. Phantom is a calendar year entity. What is the depletion for the current year? O P1,000,000 O P1,800,000 O P2,000,000 O P900,000

On July 1,2021, Phantom Corporation purchased the rights to a mine for a total purchase price of P10,000,000, of which P1,000,000 was allocable to the land. Reserves were estimated at 900,000 tons and the entity expects to extract and sell 15,000 tons per month. The entity also acquired new equipment on the same date for P5,000,000 and had a useful life of 6 years with no residual value. Phantom is a calendar year entity. What is the depletion for the current year? O P1,000,000 O P1,800,000 O P2,000,000 O P900,000

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 29CE

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