On January 2, 2018, ABC Company purchased land for ₱450,000, from which it estimated that 400,000 tons of ore could be extracted. It estimates that it will cost ₱80,000 to restore the land after which it could be sold for ₱30,000. During 2018, the company mined 80,000 tons and sold 50,000 tons. During 2019, the company mined 100,000 tons and sold 120,000 tons. At the beginning of 2020, the company spent an additional ₱100,000, which increased the reserves by 60,000 tons. In 2020, the company mined 140,000 tons and sold 130,000 tons. The company uses a FIFO cost flow assumption. The depletion included in the cost of sales for the year ended December 31, 2020______ ₱137,300 ₱168,350 ₱173,300 ₱110,900
On January 2, 2018, ABC Company purchased land for ₱450,000, from which it estimated that 400,000 tons of ore could be extracted. It estimates that it will cost ₱80,000 to restore the land after which it could be sold for ₱30,000. During 2018, the company mined 80,000 tons and sold 50,000 tons. During 2019, the company mined 100,000 tons and sold 120,000 tons. At the beginning of 2020, the company spent an additional ₱100,000, which increased the reserves by 60,000 tons. In 2020, the company mined 140,000 tons and sold 130,000 tons. The company uses a FIFO cost flow assumption. The depletion included in the cost of sales for the year ended December 31, 2020______ ₱137,300 ₱168,350 ₱173,300 ₱110,900
Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion
Section: Chapter Questions
Problem 29CE
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On January 2, 2018, ABC Company purchased land for ₱450,000, from which it estimated that 400,000 tons of ore could be extracted. It estimates that it will cost ₱80,000 to restore the land after which it could be sold for ₱30,000. During 2018, the company mined 80,000 tons and sold 50,000 tons. During 2019, the company mined 100,000 tons and sold 120,000 tons. At the beginning of 2020, the company spent an additional ₱100,000, which increased the reserves by 60,000 tons. In 2020, the company mined 140,000 tons and sold 130,000 tons.
The company uses a FIFO cost flow assumption. The depletion included in the cost of sales for the year ended December 31, 2020______
- ₱137,300
- ₱168,350
- ₱173,300
- ₱110,900
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