On June 1, 2021, ABC Company purchased rights to a mine for P30,000,000, of which, P3,000,000 was allocable to the land. Estimated reserves were 2,250,000 tons. ABC expected to extract and sell 37,500 tons per month. ABC purchased mining equipment on September 30, 2021 for P12,000,000. The mining equipment had a useful life of nine years. However, afterall the resource is removed, the equipment will be of no use and will be sold for P750,000. ANSWER THE QUESTION: What is the depletion for 2021?
On June 1, 2021, ABC Company purchased rights to a mine for P30,000,000, of which, P3,000,000 was allocable to the land. Estimated reserves were 2,250,000 tons. ABC expected to extract and sell 37,500 tons per month. ABC purchased mining equipment on September 30, 2021 for P12,000,000. The mining equipment had a useful life of nine years. However, afterall the resource is removed, the equipment will be of no use and will be sold for P750,000. ANSWER THE QUESTION: What is the depletion for 2021?
Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion
Section: Chapter Questions
Problem 29CE
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