Coal Mining acquires a property at a cost of P10,000,000. Intangible development costs amounted to P2,400,000. After extraction has occurred, SMR Coal Mining must restore the property (estimated present value of the obligation is P1,200,000), after which it can be sold for P3,400,000. The company estimates that 100,000 tons of coal can be extracted. If 18,000 tons were extracted during the first year, which of the following would be included in the entry to record the depletion?

Coal Mining acquires a property at a cost of P10,000,000. Intangible development costs amounted to P2,400,000. After extraction has occurred, SMR Coal Mining must restore the property (estimated present value of the obligation is P1,200,000), after which it can be sold for P3,400,000. The company estimates that 100,000 tons of coal can be extracted. If 18,000 tons were extracted during the first year, which of the following would be included in the entry to record the depletion?

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 29CE

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