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- Problem 3Spaces Company was engaged in the rock and gravel business. The following transactions relate to the acquisition anddevelopment of an extensive gravel pit.2019Cost of acquisition and development P960,000Estimated output 2,400,000 tonsProduction 1,000,000 tons2020Additional development cost P490,000Production 600,000 tons2021Additional development cost P500,000New estimate of remaining output 2,500,000 tonsProduction 700,000 tonsRequired:Prepare the journal entries for 2019, 2020 and 2021.9. The entity incurred the following in exploring a natural resources on January 1,2021Acquisition cost of the land P10,000,000Development cost 5,000,000Exploration cost 6,000,000Purchase of equipment 3,000,000The entity expects to mine a total of 5,000,000 tons of natural gas, it is also estimated that 1,000,000 of natural gas will be extracted every year. The useful life of the equipment is 6 years, the equipment is used over a several project not just in that specific natural resources. On 2021 the entity extracted 1,500,000 tons of natural gas. How much is the depreciation expense for the year?Group of answer choices500,0001,500,000600,000900,00017. The entity incurred the following in exploring a natural resources on January 1,2021Acquisition cost of the land P10,000,000Development cost 5,000,000Exploration cost 6,000,000Purchase of equipment 3,000,000The entity expects to mine a total of 5,000,000 tons of natural gas, it is also estimated that 1,000,000 of natural gas will be extracted every year. The useful life of the equipment is 6 years, the equipment is used over a several project not just in that specific natural resources. On 2021 the entity extracted 1,500,000 tons of natural gas. How much is the depletion for the year 2021?
- The components of the cost of a major item of equipment are given below.GHSPurchase price 780,000Import duties 117,000VAT (refundable) 78,000Site preparation 30,000Installation costs 28,000Pre-production costs 18,000Initial operating losses before the asset reaches planned performance 50,000Estimated cost of dismantling and removal of the asset, recognized as a provision under IAS 37 Provisions,Contingent Liabilities and Contingent Assets 100,0001,201,000In accordance with IAS 16 Property, Plant and Equipment, what amount should be recognized as the cost of the asset?On January 1, 2021, Dhong Mining Corp. purchased an ore mine at P30,000,000. The cost of exploration was P6,000,000, while additional development costs were P4,000,000. The resource deposit is estimated to be around 2,000,000 units. A total of 150,000 units were extracted in 2021. 250,000 units were extracted the subsequent year. Additional development expenditures for the mine were P2,000,000.00 at the beginning of 2023. The entity also calculated that there are still 2,500,000 units in the resource deposit. In 2023, 300,000 units were extracted. How much is the computed depletion rate in 2021? How much is the depletion in 2022? How much is the depletion in 2023?During 2020, ABC Company acquired a mineral mine for P1,500,000 of which P200,000 was ascribed to land value after the mineral has been removed. Geological surveys have indicated that 10 million units of the mineral could be extracted. During 2020, 1,500,000 units were extracted and 1,200,000 units were sold. What is the amount of depletion expensed for 2020? A. P180,000 B. P130,000 C. P156,000 D. P195,000
- F150 Company has the following information pertaining to its mining operations: Estimated cost of restoring property after mining is completed 400,000 Number of tons mined during the current year 50,000 tons Cost of land 6,000,000 Estimated number of tons of ores mined 400,000 tons Sales value of the land after mining 300,000 Development costs incurred 500,000 Number of tons sold during the current year 35,000 tons Cost of production (excluding depletion) P 7.00 The company already recognized the estimated restoration cost immediately after the resource property was acquired. How much would be the company’s cost of goods sold? a. 525,000 c. 787,500 b. 603,700 d. 822,500- What is the investment carrying amount at December 31, 2021? A. P1,920,000 B. P1,790,000 C. P1,730,000 D. P1,700,000 - Assume the excess of acquisition cost over the underlying equity acquired is due to a piece of equipment with remaining life of 5 years on the date of investment acquisition, and a straight-line depreciation basis, what is the investment carrying amount at December 31, 2021? A. P1,920,000 B. P1,790,000 C. P1,745,000 D. P1,730,000t December 31, 2020, Grand Company reported the following as plant assets.Land $ 4,000,000Buildings $28,500,000Less: Accumulated depreciation—buildings 12,100,000 16,400,000Equipment 48,000,000Less: Accumulated depreciation—equipment 5,000,000 43,000,000 Total plant assets $63,400,000During 2021, the following selected cash transactions occurred.April 1 Purchased land for $2,130,000.May 1 Sold equipment that cost $750,000 when purchased on January 1, 2017. The equipment was sold for $450,000.June 1 Sold land purchased on June 1, 2011 for $1,500,000. The land cost $400,000.July 1 Purchased equipment for $2,500,000.Dec. 31 Retired equipment that cost $500,000 when purchased on December 31, 2011. The company received no proceeds related to salvage.Instructions c. Prepare the plant assets section of Grand’s balance sheet at December 31, 2021.
- Qasio Private Limited (Pvt) developed a new intangible product. In developing this intangible asset, it incurred the following costs: Research R50 000, Development Costs R150 000, Marketing costs R 25 000. The Research costs were incurred between July 2020 and October 2020. The Development costs were incurred between November 2020 and December 2020. The useful life of the product arising from this project is expected to be five years, the Intangible asset was brought into use effective 1 January 2021.Additional informationQasio has a 31 December year endRequiredPrepare ALL the journal entries as at 31 December 2020 and 31 December 2021.Presented below is information related to equipment owned by Vaughn Company at December 31, 2020. Cost $10,350,000 Accumulated depreciation to date 1,150,000 Expected future net cash flows 8,050,000 Fair value 5,520,000 Assume that Vaughn will continue to use this asset in the future. As of December 31, 2020, the equipment has a remaining useful life of 4 years. The fair value of the equipment at December 31, 2021, is $5,865,000. Prepare the journal entry (if any) necessary to record this increase in fair value. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 enter an account title to record the transaction on December 31, 2018 enter a debit amount enter a credit amount enter an account title to record the transaction on December 31, 2018…ABC Corp., embarked a new venture in DEF Corporation in 2022. It expects to gleam 2,000,000 ounces of a precious ore from its holdings there, over several years. Relevant data follow: Cost of the mineral rights, P 500,000 Exploration cost, 2022 (1/3 successful). P 1,500,000 Extraction cost, 2022, P 2,000.000 Ore extracted, 2022 (500,000 oz.) Ore sold, 2022 (300,000 oz.) 1) What is depletion for 2022, using the full cost method of accounting for exploration costs? P 250,000P 150,000P 500,000P 1,000,0002) What is depletion for 2022, using the successful effort method of accounting for exploration costs?P 350,000P 300,000P 150,000P 250,000
