At the beginning of current year, Nilli company purchased a coal mine for P30,000,000. Removable coal is estimated at 1,500,000 tons. The entity is required to restore the land at an estimated cost of 3,600,000. The land is estimated to have a value of P3,150,000 after restoration. The entity incurred P7,500,000 of development cost preparing the mine for production. During the current year, 450,000 tons were removed and 300,000 tons were sold. What total amount of depletion should be recorded in the cost of goods sold for the current year?

At the beginning of current year, Nilli company purchased a coal mine for P30,000,000. Removable coal is estimated at 1,500,000 tons. The entity is required to restore the land at an estimated cost of 3,600,000. The land is estimated to have a value of P3,150,000 after restoration. The entity incurred P7,500,000 of development cost preparing the mine for production. During the current year, 450,000 tons were removed and 300,000 tons were sold. What total amount of depletion should be recorded in the cost of goods sold for the current year?

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 29CE

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