PLEASE PROVIDE THE SSOLUTIONS FOR THE CORRECT ANSWERS In 20x1, OBSTREPEROUS NOISY Mining Corp. acquired the right to use 1,000 acres of land to mine for gold. The lease cost is ₱200,000,000, and the related exploration costs on the property amounted to ₱40,000,000. It is the policy of OBSTREPEROUS Mining Corp. to capitalize all costs of exploration and evaluation of mineral resources. Intangible development costs of drilling, tunnels, shafts, and wells incurred before opening the mine amounted to ₱340,00,000. At the end of the mine’s economic useful life, OBSTREPEROUS Mining Corp. is required by legislation to restore the site. Estimated restoration costs have a fair value of ₱20,000,000. OBSTREPEROUS Mining Corp. estimates that the mine will provide approximately 100,000,000 ounces of gold. Actual ounce of gold mined in 20x2 totaled 300,000 ounces. 3. How much is the depletion charge in 20x2? a. 1,740,000 b. 1,800,000 c. 165,000 d. 150,000 4. Assuming that of the 300,000 ounces of gold extracted in 20x2, 280,000 ounces were sold and 20,000 ounces remain in inventory. How much depletion is recognized in the 20x2 (a) statement of financial position and (b) statement of profit or loss and other comprehensive income, respectively? Statement of financial position Statement of profit or loss a. 1,680,000 120,000 b. 116,000 1,624,000 c. 11,000 154,000 d. 120,000 1,680,000
PLEASE PROVIDE THE SSOLUTIONS FOR THE CORRECT ANSWERS
In 20x1, OBSTREPEROUS NOISY Mining Corp. acquired the right to use 1,000 acres of land to mine
for gold. The lease cost is ₱200,000,000, and the related exploration costs on the property amounted
to ₱40,000,000. It is the policy of OBSTREPEROUS Mining Corp. to capitalize all costs of exploration
and evaluation of mineral resources. Intangible development costs of drilling, tunnels, shafts, and
wells incurred before opening the mine amounted to ₱340,00,000. At the end of the mine’s economic
useful life, OBSTREPEROUS Mining Corp. is required by legislation to restore the site. Estimated
restoration costs have a fair value of ₱20,000,000. OBSTREPEROUS Mining Corp. estimates that the
mine will provide approximately 100,000,000 ounces of gold. Actual ounce of gold mined in 20x2
totaled 300,000 ounces.
3. How much is the depletion charge in 20x2?
a. 1,740,000 b. 1,800,000 c. 165,000 d. 150,000
4. Assuming that of the 300,000 ounces of gold extracted in 20x2, 280,000 ounces were sold and
20,000 ounces remain in inventory. How much depletion is recognized in the 20x2 (a)
of financial position
respectively?
Statement of financial position Statement of profit or loss
a. 1,680,000 120,000
b. 116,000 1,624,000
c. 11,000 154,000
d. 120,000 1,680,000
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