On Jan 1, 20X1 ABC Mining Co. purchased a mine for P2,640,000 with removable ore estimated at 1,200,000 tons. ABC is required by law to restore the land to its original state at an estimated cost of P220,000. Present value of the restoration cost is P180,000. ABC believes that they can sell the land after extracting all the ore at P300,000. Development cost in preparing the mine for production is P360,000. On Dec 31, 20X1, ABC removed and sold 60,000 tons of ore. In its 20X1 profit/loss statement, what amount should ABC report as depletion?
On Jan 1, 20X1 ABC Mining Co. purchased a mine for P2,640,000 with removable ore estimated at 1,200,000 tons. ABC is required by law to restore the land to its original state at an estimated cost of P220,000. Present value of the restoration cost is P180,000. ABC believes that they can sell the land after extracting all the ore at P300,000. Development cost in preparing the mine for production is P360,000. On Dec 31, 20X1, ABC removed and sold 60,000 tons of ore. In its 20X1 profit/loss statement, what amount should ABC report as depletion?
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter9: Depreciation (deprec)
Section: Chapter Questions
Problem 1R: Dunedin Drilling Company recently acquired a new machine at a cost of 350,000. The machine has an...
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On Jan 1, 20X1 ABC Mining Co. purchased a mine for P2,640,000 with removable ore estimated at 1,200,000 tons. ABC is required by law to restore the land to its original state at an estimated cost of P220,000. Present value of the restoration cost is P180,000. ABC believes that they can sell the land after extracting all the ore at P300,000. Development cost in preparing the mine for production is P360,000. On Dec 31, 20X1, ABC removed and sold 60,000 tons of ore.
In its 20X1
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