the mine for the low price of P50,000. Problem 30-6 (IAA) Eastern Mindanao. Because the mine is located de In 2018, Sunflower Company acquired a silver In 2018, Sunflower Company acquired a silver In 2019, Sunflower Company constructed a road to Mindanao frontier, Sunflower Company was able E In 2019, Sunfflower Company constructed a road to mine costing P5,000,000. Improvements ar development costs made in 2019 cost P750,000. Because of the improvements to the mine ar surrounding land, it is estimated i for PG00.000 uh
the mine for the low price of P50,000. Problem 30-6 (IAA) Eastern Mindanao. Because the mine is located de In 2018, Sunflower Company acquired a silver In 2018, Sunflower Company acquired a silver In 2019, Sunflower Company constructed a road to Mindanao frontier, Sunflower Company was able E In 2019, Sunfflower Company constructed a road to mine costing P5,000,000. Improvements ar development costs made in 2019 cost P750,000. Because of the improvements to the mine ar surrounding land, it is estimated i for PG00.000 uh
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:In 2018, Sunflower Company acquired a silver mine in
Eastern Mindanao. Because the mine is located deep in the
have any residual value.
2. Compute the depreciation for 2021 and 2022.
Mindanao frontier, Sunflower Company was able to acquire
the mine for the low price of P50,000.
Problem 30-6 (IAA)
In 2019, Sunflower Company constructed a road to the silver
mine costing P5,000,000. Improvements and other
development costs made in 2019 cost P750,000.
Because of the improvements to the mine and to the
surrounding land, it is estimated that the mine can be sold
for P600,000 when mining activities are complete.
During 2020, five buildings were constructed near the mine
site to house the mine workers and their families.
The total cost of the five buildings was P2,000,000. Estimated
residual value is P200,000.
In 2021, geologists estimated that 4,000,000 tons of silver ore
could be removed from the mine for refining.
During 2021, the first year of operations, only 500,000 tons
of silver ore were removed from the mine.
However, in 2022, workers mined 1,000,000 tons of silver.
During that same year, geologists discovered that the mine
contained 3,000,000 tons of silver ore in addition to the
original 4,000,000 tons.
Additional development costs of P1,300,000 were made to
the mine early in 2022 to facilitate the removal of the
additional silver.
Early in 2022, an additional building was constructed at a
cost of P375,000 to house the additional workers needed to
excavate the added silver. This building is not expected to
Required:
* Compute the depletion for 2021 and 2022.
Compute the depreciation for 2021 and 2022.
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