A certain mining company in Masbate has the 5 years record of its natural deposit extraction, 250,000 tons for the 1st year, 320,000 tons for the 2nd year, 360,000 tons for the 3rd year, 300,000 and 280,000 tons for the 4th and 5th year, respectively. The estimated natural deposit is about 5,000,000 tons and the company's initial cost is 120,000,000 million pesos. If the company had a gross income of 2,200 pesos per ton for the first 2 years, then 3,000 pesos per ton for the last 3 years. Determine: a.) The depletion charge for each year using the larger values for the 2 methods and b.) The percentage of the initial cost that has been written off in the 5 years.

A certain mining company in Masbate has the 5 years record of its natural deposit extraction, 250,000 tons for the 1st year, 320,000 tons for the 2nd year, 360,000 tons for the 3rd year, 300,000 and 280,000 tons for the 4th and 5th year, respectively. The estimated natural deposit is about 5,000,000 tons and the company's initial cost is 120,000,000 million pesos. If the company had a gross income of 2,200 pesos per ton for the first 2 years, then 3,000 pesos per ton for the last 3 years. Determine: a.) The depletion charge for each year using the larger values for the 2 methods and b.) The percentage of the initial cost that has been written off in the 5 years.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 6PA: Gimli Miners recently purchased the rights to a diamond mine. It is estimated that there are one...

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