Problem 28-13 (AICPA Adapted) In 2019, Lepanto Mining Company purchased property with natural resources for P28,000,000. The property nad a residual value of P5,000,000. However, the entity is required to restore the property to the original condition at a discounted amount of P2,000,000. In 2019, the entity spent P1,000,000 in development cost and constructed a building on the property costing P3,000,000. The entity does not anticipate that the building will have utility after the natural resources are removed. In 2020, an amount of P1,000,000 was spent for additional development on the mine. The tonnage mined and estimated remaining tons are: Tons extracted Tons remaining 10,000,000 7,000,000 2,500,000 2019 3,000,000 3,500,000 2020 2021 1. What amount should be recognized as depletion for 2020? a. 6,900,000 b. 9,600,000 c. 8,100,000 d. 8,400,000 2. What amount should be recognized as depletion for 2021? a. 10,150,000 b. 11,025,000 'c. 15,750,000 9,450,000 d.

Problem 28-13 (AICPA Adapted) In 2019, Lepanto Mining Company purchased property with natural resources for P28,000,000. The property nad a residual value of P5,000,000. However, the entity is required to restore the property to the original condition at a discounted amount of P2,000,000. In 2019, the entity spent P1,000,000 in development cost and constructed a building on the property costing P3,000,000. The entity does not anticipate that the building will have utility after the natural resources are removed. In 2020, an amount of P1,000,000 was spent for additional development on the mine. The tonnage mined and estimated remaining tons are: Tons extracted Tons remaining 10,000,000 7,000,000 2,500,000 2019 3,000,000 3,500,000 2020 2021 1. What amount should be recognized as depletion for 2020? a. 6,900,000 b. 9,600,000 c. 8,100,000 d. 8,400,000 2. What amount should be recognized as depletion for 2021? a. 10,150,000 b. 11,025,000 'c. 15,750,000 9,450,000 d.

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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