On January 1, 2022, Annie Company purchased a mineral mine for P26,400,000 with removable ore estimated at 1,200,000 tons. After it has all the ore, the entity will be required by law to restore the land to its original condition at an estimated cost of P2,200,000. The present value of the estimated restoration cost is P1,800,000. The property can be sold afterwards for P3,000,000. During 2021, the entity incurred P2,000,000 exploration cost and P1,600,000 development cost preparing the mine for production. The entity removed 80,000 tons of ore and sold 60,000 tons of ore in 2022. What amount of depletion should be included in the cost of sales for 2022? A. 1,920,000 B. 1,440,000 C. 1,500,000 D. 1,590,000

On January 1, 2022, Annie Company purchased a mineral mine for P26,400,000 with removable ore estimated at 1,200,000 tons. After it has all the ore, the entity will be required by law to restore the land to its original condition at an estimated cost of P2,200,000. The present value of the estimated restoration cost is P1,800,000. The property can be sold afterwards for P3,000,000. During 2021, the entity incurred P2,000,000 exploration cost and P1,600,000 development cost preparing the mine for production. The entity removed 80,000 tons of ore and sold 60,000 tons of ore in 2022. What amount of depletion should be included in the cost of sales for 2022? A. 1,920,000 B. 1,440,000 C. 1,500,000 D. 1,590,000

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

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 11E: On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an...

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