At the beginning of the current year, Bert Company purchased a mineral mine for P26,400,000 with removable ore estimated at 1,200,000 tons. After it has extracted all the ore, Bert will be required by law to restore the land to its original condition at an estimated cost of P2,100,000. The present value of the estimated restoration cost is P1,800,000. Bert believed that it will be able to sell the property afterwards for P3,000,000. During the current year, Bert incurred P3,600,000 of development cost preparing the mine for production. removed 80,000 tons of ore and sold 60,000 tons.
At the beginning of the current year, Bert Company purchased a mineral mine for P26,400,000 with removable ore estimated at 1,200,000 tons. After it has extracted all the ore, Bert will be required by law to restore the land to its original condition at an estimated cost of P2,100,000. The present value of the estimated restoration cost is P1,800,000. Bert believed that it will be able to sell the property afterwards for P3,000,000. During the current year, Bert incurred P3,600,000 of development cost preparing the mine for production. removed 80,000 tons of ore and sold 60,000 tons.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments
Section: Chapter Questions
Problem 6RE
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