Chapter 30 - Depletion Question 1-2. At the beginning of the year 2021, Wise Corp. purchased a mineral mine for P30,000,000 with removable ore estimated at 1,500,000 tons. After it has extracted all the ore, the entity will be required by law to restore the land to the original conditions at an estimated cost of P2, 500,000. The present value of the estimated restoration cost is P1,800,000. The estimated residual value of the property is P3,000,000 During the current year, the entity incurred P3, 800,000 of cost in developing the property and preparing the mine for production and removed 90,000 tons and sold 70,000 tons of ore. Q1. What amount should be depletable and at what rate per unit? 33,000,000 30.00 per unit b. 27,800,000 : 29.67 per unit 32,600,000 21.73 per unit d. 30,000,000 : 18.97 per unit a. C. Q2. What amount should be reported as depletion for the current year? a. 2,495,700 b. 3,000,000 C. 32,600,000 d. 1,941,000
Chapter 30 - Depletion Question 1-2. At the beginning of the year 2021, Wise Corp. purchased a mineral mine for P30,000,000 with removable ore estimated at 1,500,000 tons. After it has extracted all the ore, the entity will be required by law to restore the land to the original conditions at an estimated cost of P2, 500,000. The present value of the estimated restoration cost is P1,800,000. The estimated residual value of the property is P3,000,000 During the current year, the entity incurred P3, 800,000 of cost in developing the property and preparing the mine for production and removed 90,000 tons and sold 70,000 tons of ore. Q1. What amount should be depletable and at what rate per unit? 33,000,000 30.00 per unit b. 27,800,000 : 29.67 per unit 32,600,000 21.73 per unit d. 30,000,000 : 18.97 per unit a. C. Q2. What amount should be reported as depletion for the current year? a. 2,495,700 b. 3,000,000 C. 32,600,000 d. 1,941,000
Corporate Financial Accounting
14th Edition
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter9: Long-term Assets: Fixed And Intangible
Section: Chapter Questions
Problem 9.12EX
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Transcribed Image Text:11:29 AM
oi o years and the estimated residual value is F000,000.
Q1. What will be the value of accumulated depreciation in the year of 2021?
Q2. What will be the carrying amount of the machine on December 31,
2022?
Chapter 30 - Depletion
Question 1-2.
At the beginning of the year 2021, Wise Corp. purchased a mineral mine
for P30,000,000 with removable ore estimated at 1,500,000 tons.
After it has extracted all the ore, the entity will be required by law to restore
the land to the original conditions at an estimated cost of P2, 500,000. The
present value of the estimated restoration cost is P1,800,000.
The estimated residual value of the property is P3,000,000
During the current year, the entity incurred P3, 800,000 of cost in developing
the property and preparing the mine for production and removed 90,000
tons and sold 70,000 tons of ore.
Q1. What amount should be depletable and at what rate per unit?
33,000,000 30.00 per unit
b. 27,800,000: 29.67 per unit
32,600,000: 21.73 per unit
d. 30,000,000: 18.97 per unit
a.
C.
Q2. What amount should be reported as depletion for the current
year?
a. 2,495,700
416%
b. 3,000,000
C.
32,600,000
d. 1,941,000
Question 3-4.
A new year had begun, JK Company, a mining institute, purchased a
mineral mine for P56,000,000 with ore estimated by geological survey at
2,750,000 tons. The property has an estimated residual value of
P4,500,000.
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