On June 1, 2021, ABC Company purchased rights to a mine for P30,000,000, of which, P3,000,000 was allocable to the land. Estimated reserves were 2,250,000 tons. ABC expected to extract and sell 37,500 tons per month. ABC purchased mining equipment on September 30, 2021 for P12,000,000. The mining equipment had a useful life of nine years. However, after all the resource is removed, the equipment will be of no use and will be sold for P750,000. ANSWER THE QUESTION: What is the carrying amount of the mineral property at the end of 2021?

On June 1, 2021, ABC Company purchased rights to a mine for P30,000,000, of which, P3,000,000 was allocable to the land. Estimated reserves were 2,250,000 tons. ABC expected to extract and sell 37,500 tons per month. ABC purchased mining equipment on September 30, 2021 for P12,000,000. The mining equipment had a useful life of nine years. However, after all the resource is removed, the equipment will be of no use and will be sold for P750,000. ANSWER THE QUESTION: What is the carrying amount of the mineral property at the end of 2021?

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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