17.ABC Company acquired a tract of land containing an extractable natural resource. ABC Co. is required by the purchase contract to restore the land to a condition suitable for recreational use after extraction of the natural resource. Geological surveys estimated that the recoverable reserves will be 200,000 tons and that the land will have a value of P1,000,000 after restoration. Relevant costs information are the following: Land acquisition cost P8,000,000; Estimated restoration cost P500,000; Development and geological surveys cost P1,500,000. What should be the depletion rate per ton of resource?
17.ABC Company acquired a tract of land containing an extractable natural resource. ABC Co. is required by the purchase contract to restore the land to a condition suitable for recreational use after extraction of the natural resource. Geological surveys estimated that the recoverable reserves will be 200,000 tons and that the land will have a value of P1,000,000 after restoration. Relevant costs information are the following: Land acquisition cost P8,000,000; Estimated restoration cost P500,000; Development and geological surveys cost P1,500,000. What should be the depletion rate per ton of resource?
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 11EB: The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining...
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17.ABC Company acquired a tract of land containing an extractable natural resource. ABC Co. is required by the purchase contract to restore the land to a condition suitable for recreational use after extraction of the natural resource. Geological surveys estimated that the recoverable reserves will be 200,000 tons and that the land will have a value of P1,000,000 after restoration. Relevant costs information are the following: Land acquisition cost P8,000,000; Estimated restoration cost P500,000; Development and geological surveys cost P1,500,000. What should be the depletion rate per ton of resource?
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