11:39O 0 l .l91Module1_PPE and I...Problem 28-11 (AICPA Adapted)On July 1, Lethargic Company, a calendar year entitypurchased the rights to a mine. The total purchase price wasP14,000,000, of which P2,000,000 was allocable to the landEstimated reserves were 1,500,000 tons. The entity expects toextract and sell 25,000 tons per month.The entity purchased new equipment on July 1. Theequipment was purchased for P8,000,000 and had a uselife of 4 years with no residual value.1. What is the depletion for the current year?a. 1,200,000b. 2,400,000c. 1,950,000d. 1,400,0002. What is the depreciation of the equipment for the currentyear?a. 1,600,000b. 2,000,000c. 1,000,000d. 1,200,000

The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…

n July 1, Lethargic Company, a calendar year entity. archased the rights to a mine. The total purchase price 4,000,000, of which P2,000,000 was allocable to the land was stimated reserves were 1,500,000 tons. The entity expects to tract and sell 25,000 tons per month. ne entity purchased new equipment on July 1. The uipment was purchased for P8,000,000 and had a useful e of 4 years with no residual value. What is the depletion for the current year?

n July 1, Lethargic Company, a calendar year entity. archased the rights to a mine. The total purchase price 4,000,000, of which P2,000,000 was allocable to the land was stimated reserves were 1,500,000 tons. The entity expects to tract and sell 25,000 tons per month. ne entity purchased new equipment on July 1. The uipment was purchased for P8,000,000 and had a useful e of 4 years with no residual value. What is the depletion for the current year?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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