A coal mining company has owned a mine for the past 5 years. During this time the following tonnage of ore has been removed each year: 25k, 32k, 36k, 30k & 28k tons. The mine is estimated to contain a total of 500k tons of coal. The initial cost of the mine is P12M. If the company has a gross income for this coal of P220 per ton for the first 2 years, and P300 per ton for the last 3 years, determine the depletion charge for last year using gross income method.
A coal mining company has owned a mine for the past 5 years. During this time the following tonnage of ore has been removed each year: 25k, 32k, 36k, 30k & 28k tons. The mine is estimated to contain a total of 500k tons of coal. The initial cost of the mine is P12M. If the company has a gross income for this coal of P220 per ton for the first 2 years, and P300 per ton for the last 3 years, determine the depletion charge for last year using gross income method.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A coal mining company has owned a mine for the past 5 years. During this time the following tonnage of ore has been removed each year: 25k, 32k, 36k, 30k & 28k tons. The mine is estimated to contain a total of 500k tons of coal. The initial cost of the mine is P12M. If the company has a gross income for this coal of P220 per ton for the first 2 years, and P300 per ton for the last 3 years, determine the depletion charge for last year using gross income method.
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