In 20x1, ABC Mining Corp. acquired the right to use 1,000 acres of land to mine for gold. The lease cost is ₱50,000,000, and the related exploration costs on the property amounted to ₱10,000,000. It is the policy of ABC Mining Corp. to capitalize all costs of exploration and evaluation of mineral resources. Intangible development costs for drilling, tunnels, shafts, and wells incurred before opening the mine amounted to ₱85,000,000. At the end of the mine’s economic useful life, ABC Mining Corp. is required by legislation to restore the site. Estimated restoration costs have a fair value of ₱5,000,000. ABC Mining Corp. estimates that the mine will provide approximately 100,000,000 ounces of gold. ABC extracted 300,000 ounces of gold in 20x2. How much is the depletion charge in 20x2?

In 20x1, ABC Mining Corp. acquired the right to use 1,000 acres of land to mine for gold. The lease cost is ₱50,000,000, and the related exploration costs on the property amounted to ₱10,000,000. It is the policy of ABC Mining Corp. to capitalize all costs of exploration and evaluation of mineral resources. Intangible development costs for drilling, tunnels, shafts, and wells incurred before opening the mine amounted to ₱85,000,000. At the end of the mine’s economic useful life, ABC Mining Corp. is required by legislation to restore the site. Estimated restoration costs have a fair value of ₱5,000,000. ABC Mining Corp. estimates that the mine will provide approximately 100,000,000 ounces of gold. ABC extracted 300,000 ounces of gold in 20x2. How much is the depletion charge in 20x2?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 11EB: The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining...

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In 20x1, ABC Mining Corp. acquired the right to use 1,000 acres of land to mine for gold. The lease cost is ₱50,000,000, and the related exploration costs on the property amounted to ₱10,000,000. It is the policy of ABC Mining Corp. to capitalize all costs of exploration and evaluation of mineral resources. Intangible development costs for drilling, tunnels, shafts, and wells incurred before opening the mine amounted to ₱85,000,000. At the end of the mine’s economic useful life, ABC Mining Corp. is required by legislation to restore the site. Estimated restoration costs have a fair value of ₱5,000,000. ABC Mining Corp. estimates that the mine will provide approximately 100,000,000 ounces of gold. ABC extracted 300,000 ounces of gold in 20x2. How much is the depletion charge in 20x2? 450,000 3.360,000 480,000 4. 460,000
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