Problem 10The Maria Lovella Mining Company purchased for P13,000,000 mining property estimated tocontain 1,000,000 tons of ore. The residual value of the property is P1,000,000.Buildings used in mine operations costs P1,000,000 and have an estimated life of ten years withno residual value. Mine machinery costs P2,000,000 with an estimated residual value ofP400,000 after its physical life of 4 years.Following is the summary of the company's operations for the first two years:Second YearFirst Year100,000 tonsTons mined130,000 tonsTons sold80,000 tons120,000 tonsP 45.00Unit selling price per tonDirect laborP 44.00P 800,000P 840,000Miscellaneous mining overheadP 160,000P 240,000Operating expensesP 720,000P 760,000Inventories are valued on a first-in, first-out. Depreciation on the building is to be allocated asfollows: 20% to operating expenses, 80% to production. Depreciation on machinery is chargeableto production.Question:26. The cost of inventory (ore) in the first year is:a. P 532,000b. P 528,000c. P 512,000d. P 480,00027. The cost of inventory (ore) in the second year is:a. P 735,790b. P 725,540c. P 713,590d. P 697,84628. Net income in the first year is:a. P 672,000b. P 668,000c. P 652,000d. P 620,00029. Net income in the second year is:a. P 1,695,234b. P 1,677,790c. P 1,667,540d. P 1,655,590

Name: Problem 10The Maria Lovella Mining Company purchased for P13,000,000
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Description: Problem 10The Maria Lovella Mining Company purchased for P13,000,000 mining property estimated tocontain 1,000,000 tons of ore. The residual value of the property is P1,000,000.Buildings used in mine operations costs P1,000,000 and have an estimated

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26. The cost of inventory (ore) in the first year is:

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 6PB: Underwoods Miners recently purchased the rights to a diamond mine. It is estimated that there are...

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