In January, 2004, Nixon Corporation purchased a mineral mine for P6,800,000 with removable ore estimated by geological surveys at 2,000,000 tons. The property has an estimated value of P400,000 after the ore has been extracted. The company incurred P2,000,000 of development costs preparing the mine for production. During 2004, 500,000 tons were removed and 400,000 tons were sold. What is the amount of depletion that Nixon should expense for 2004?

In January, 2004, Nixon Corporation purchased a mineral mine for P6,800,000 with removable ore estimated by geological surveys at 2,000,000 tons. The property has an estimated value of P400,000 after the ore has been extracted. The company incurred P2,000,000 of development costs preparing the mine for production. During 2004, 500,000 tons were removed and 400,000 tons were sold. What is the amount of depletion that Nixon should expense for 2004?

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 29CE

See similar textbooks

Similar questions

The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining legal life of twelve years is bought, and Hanna expects to be able to use it for six years. It is purchased at a cost of $48,000. B. A copyright with a remaining life of thirty years is purchased, and Hanna expects to be able to use it for ten years. It is purchased for $70,000. Determine the annual amortization amount for each intangible asset.
At the beginning of the current year, Handsome Company purchased a mineral mine for P36,000,000 with removable ore estimated by geological survey at 2,160,000 tons. The property has an estimated value of P3,600,000 after the ore has been extracted. The entity incurred P10,800,000 of development costs preparing the property for the extraction of ore. During the current year, 270,000 tons were removed and 240,000 tons were sold. What amount of depletion should be included in cost of goods sold for the current year? *a.3,600,000b.4,050,000c.4,800,000d.5,400,000
In January 2018, HUKAY Mining Corporation purchased a mineral mine for P7,200,000 with removable ore estimated by geological surveys at 4,320,000 tons. The property has an estimated value of P720,000 after the ore has been extracted. HUKAY incurred P2,160,000 of development costs preparing the property for the extraction of ore. During 2018, 540,000 tons were removed and 480,000 tons were sold. For the year ended December 31, 2018, HUKAY included P960,000 of depletion in its cost of goods sold. What should be the amount of depletion to be included in the cost of goods sold? Answer in figures, ignore peso sign.
In January 2018 PM Corporation purchased a mineral mine for P14,400,000 with removable ore estimated by geological surveys at 8,640,000 tons. The property has an estimated value of P1,440,000 after the ore has been extracted. The company incurred P4,320,000 of intangible development costs in preparing the property for the extraction of ore. During 2020, 1,080,000 tons were removed and 960,000 were sold. For the year ended December 31, 2020, how much should the company include as depletion in its cost of goods sold? * 1,440,000 1,620,000 1,920,000 2,160,000
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?
In January 2022, Rover Mining Corporation purchased a mineral mine for P4,200,000 with removable ore estimated by geological surveys at 2,500,000 tons. The property has an estimated value of P400,000 after the ore has been extracted. Rover incurred P1,150,000 of development costs preparing the property for the extraction of ore. During 2022, 340,000 tons were removed and 300,000 tons were sold. For the year ended December 31, 2022, Rover should record what amount of depletion for the current year? P516,800 P594,000 P456,000 O P673,200
In January 2022, Proton Mining Corporation purchased a mineral mine for P4,200,000 with removable ore estimated by geological surveys at 2,500,000 tons. The property has an estimated value of P400,000 after the ore has been extracted. Proton incurred P1,150,000 of development costs preparing the property for the extraction of ore. During 2022, 340,000 tons were removed and 300,000 tons were sold. For the year ended December 31, 2022, Proton should record what amount of depletion for the current year? O P594,000 O P456,000 O P673,200 O P516,800
At the beginning of January 2018, Rock Limited acquired a mine for sh34,000,000. Of this amount, sh. 4,000,000 was ascribed to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists have indicated that approximately 480,000,000 units of a precious ore appear to be in the mine. Rock incurred sh. 5,000,000 of development costs associated with this mine prior to any extraction of minerals and estimates that it will require sh. 1,600,000 to prepare the land for an alternative use when all the ore has been removed. During 2018, 40,000,000 units of ore were extracted and 16,000,000 of these units were sold. Compute the total amount of depletion and the cost of the minerals sold in 2018.
In 20X1, ABC Co. paid P1M to purchase a land containing a total estimated 160,000 tons of extractable mineral ore. The estimated value of the property after the mineral has been removed is P200,000. Extracted operations began in late 20X1 with a total extracted ores of 20,000 tons were sold until the end of 20X2. In 20X3, geological studies indicated that the total amount of mineral deposits had been underestimated by 25,000 tons. During 20X3, 30,000 tons were extracted and 28,000 tons were sold. What is the depletion rate per ton at 20X3? (round answer to nearest centavo/ 2 decimal points)
In January 2015, Fehr Mining Corporation purchased a mineral mine for $6,061,128 with removable ore estimated by geological surveys at 2,598,777 tons. The property has an estimated value of $600,000 after the ore has been extracted. Fehr incurred $1,703,643 of development costs preparing the property for the extraction of ore. During 2015, 340,000 tons were removed and 300,000 tons were sold. What is the total amount of depletion for 2015? (do not round the depletion rate when multiplying it by units removed or sold)
During 2004, Bolton Corporation acquired a mineral mine for P3,000,000 of which P400,000 was ascribed to land value after the mineral has been removed. Geological surveys have indicated that 10 million units of the mineral could be extracted. During 2004, 2,000,000 units were extracted and 1,600,000 units were sold. What is the amount of depletion expensed for 2004? P480,000 P520,000 P416,000 P600,000
During 2014, Bolton Corporation acquired a mineral mine for P1,500,000 of which P200,000 wasascribed to land value after the mineral has been removed. Geological surveys have indicated that10 million units of the mineral could be extracted. During 2014, 2,000,000 units were extracted and1,600,000 units were sold. What is the amount of depletion expensed for 2014? a. P300,000 b. P208,000 c. P240,000 d. P260,000