In January 2019, Straw Corporation purchased a mineral mine for P9,800,000 with removable ore estimated by geological surveys at 3,280,000 tons. The property has an estimated value of P840,000 after the ore has been extracted. The company incurred P880,000 of development costs in preparing the property for the extraction of ore. During 2019, 340,000 tons were removed and 280,000 tons were sold. For the year ended December 31, 2019, how much should the corporation include as depletion expense in its cost of goods sold?
In January 2019, Straw Corporation purchased a mineral mine for P9,800,000 with removable ore estimated by geological surveys at 3,280,000 tons. The property has an estimated value of P840,000 after the ore has been extracted. The company incurred P880,000 of development costs in preparing the property for the extraction of ore. During 2019, 340,000 tons were removed and 280,000 tons were sold. For the year ended December 31, 2019, how much should the corporation include as depletion expense in its cost of goods sold?
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
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 8MC: On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was...
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In January 2019, Straw Corporation purchased a mineral mine for P9,800,000 with removable ore estimated by geological surveys at 3,280,000 tons. The property has an estimated value of P840,000 after the ore has been extracted. The company incurred P880,000 of development costs in preparing the property for the extraction of ore. During 2019, 340,000 tons were removed and 280,000 tons were sold. For the year ended December 31, 2019, how much should the corporation include as depletion expense in its cost of goods sold?
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