Problem 28-9 (AICPA Adapted)purchased a mineral mine for P36,000,000 with removableAt the beginning of current year, Handsome Companyore estimated by geological survey at 2,160,000 tons. Theproperty has an estimated value of P3,600,000 after the orehas been extracted.The entity incurred P10,800,000- of development costspreparing the property for the extraction of ore.During the current year, 270,000 tons were removed and240,000 tons were sold.What amount of depletion should be included in cost of goodssold for the current year?a. 3,600,000b. 4,050,000c. 4,800,000d. 5,400,000

Total cost of mineral mine = purchased costs + development costs = P36,000,000 + P10,800,000 =…

Answered: survey at 2,160,000 tons. The alue of…

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survey at 2,160,000 tons. The alue of P3,600,000 after the ore 00,000- of development costs ne extraction of org

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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Question

Problem 28-9 (AICPA Adapted)
purchased a mineral mine for P36,000,000 with removable
At the beginning of current year, Handsome Company
ore estimated by geological survey at 2,160,000 tons. The
property has an estimated value of P3,600,000 after the ore
has been extracted.
The entity incurred P10,800,000- of development costs
preparing the property for the extraction of ore.
During the current year, 270,000 tons were removed and
240,000 tons were sold.
What amount of depletion should be included in cost of goods
sold for the current year?
a. 3,600,000
b. 4,050,000
c. 4,800,000
d. 5,400,000

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