16. Ebasan Company is involved in the exploration for mineral resources. Its policy is to recognize exploration assets and measure them initially at cost. The following amounts were extracted from Ebasan's financial statements: Trenching and sampling expenditure P500,000 300,000 Drilling rigs used for exploration, carrying amount Drilling rigs used for exploration, depreciation expense 30,000 In accordance with PFRS 6 Exploration for and evaluation of mineral resources, at what amount should intangible exploration assets be initially recognized at in the financial statements? A. 500,000 B. 800,000 C. 530,000 D. 830,000

16. Ebasan Company is involved in the exploration for mineral resources. Its policy is to recognize exploration assets and measure them initially at cost. The following amounts were extracted from Ebasan's financial statements: Trenching and sampling expenditure P500,000 300,000 Drilling rigs used for exploration, carrying amount Drilling rigs used for exploration, depreciation expense 30,000 In accordance with PFRS 6 Exploration for and evaluation of mineral resources, at what amount should intangible exploration assets be initially recognized at in the financial statements? A. 500,000 B. 800,000 C. 530,000 D. 830,000

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Description: 16. Ebasan Company is involved in the exploration for mineral resources. Its policy is to recognize explorationassets and measure them initially at cost. The following amounts were extracted from Ebasan's financialstatements:Trenching and sampling e

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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2. The ABC Company is involved in the exploration of mineral rights. Its policy is to recognize exploration assets and measure them initially at cost. During 2021 ABC incurs the following expenditure. Exploratory drilling for minerals on site and related activities, P200,000; Roads and infrastructure to access exploration site P350,000, Expenditures relating to the subsequent development of the resources, P340,000. In accordance with IFRS6 Exploration for and evaluation of mineral resources, at what amount should exploration assets be initially recognized in the financial statements of ABC?
Use the following information for the next two questions: In 20x1, BUCOLIC RURAL Co. acquired land for a total cost of P40,000,000 to be used to quarry marble, limestone, and construction aggregates. Costs incurred to obtain legal right to explore the property amounted to P8,000,000. Expenditures incurred in the exploration for and evaluation of mineral resources before technical feasibility and commercial viability of extracting a mineral resource are demonstrable totaled P12,000,000. Intangible development costs of drilling, tunnels, shafts, and wells before the actual production totaled P20,000,000. BUCOLIC Co. estimates that total recoverable reserves are 100,000,000 units. Furthermore, BUCOLIC Co. expects to sell the land for P4,800,000 after resource is depleted. However, no buyer will pay this price unless the mine is drained, filled and leveled, a process that will cost P800,000. It is BUCOLIC's policy to capitalize all exploration costs. Actual units quarried in 20x1 through…
PLEASE PROVIDE THE SOLUTIONS FOR THE CORRECT ANSWERS!!! In 20x1, BUCOLIC RURAL Co. acquired land for a total cost of ₱40,000,000 to be used to quarrymarble, limestone, and construction aggregates. Costs incurred to obtain legal right to explore theproperty amounted to ₱8,000,000. Expenditures incurred in the exploration for and evaluation ofmineral resources before technical feasibility and commercial viability of extracting a mineralresource are demonstrable totaled ₱12,000,000. Intangible development costs of drilling, tunnels,shafts, and wells before the actual production totaled ₱20,000,000. BUCOLIC Co. estimates that totalrecoverable reserves are 100,000,000 units. Furthermore, BUCOLIC Co. expects to sell the land for₱4,800,000 after resource is depleted. However, no buyer will pay this price unless the mine isdrained, filled and leveled, a process that will cost ₱800,000. It is BUCOLIC’s policy to capitalize allexploration costs.Actual units quarried in 20x1 through 20x4 totaled…
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