In 2018, Lepanto Mining Company purchased property with natural resources for P28,000,000. The property had a residual value of P5,000,000. However, the entity is required in restore the property to its original condition at a discounted amount P2, 000,000. In 2018, Lepanto spent P1,000,000 for development cost and P3,000,000 for a building on the property. Lepanto does not anticipate that the building will have utility after the natural resources are removed. In 2019, at amount of P1,000,000 was spent for additional development on the mine. That tonnage mined and estimated remaining tons for 2018, 2019 and 2020 are as follows:

In 2018, Lepanto Mining Company purchased property with natural resources for P28,000,000. The property had a residual value of P5,000,000. However, the entity is required in restore the property to its original condition at a discounted amount P2, 000,000. In 2018, Lepanto spent P1,000,000 for development cost and P3,000,000 for a building on the property. Lepanto does not anticipate that the building will have utility after the natural resources are removed. In 2019, at amount of P1,000,000 was spent for additional development on the mine. That tonnage mined and estimated remaining tons for 2018, 2019 and 2020 are as follows:

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

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 7RE: Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of...

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