eight years. However, after all the resources are removed, the equipment will be of no use and will be sold for ₱500,000. What is the depreciation for 2020?    On July 1, 2020, MAGNOLIA Company purchased the rights to a mine for ₱13,200,000, of which ₱1,200,000 was allocable to the land. Estimated reserves were 1,500,000 tons. The entity expects to extract and sell 25,000 tons per month. The entity purchased mining equipment on July 1, 2020 for ₱9,500,000. The mining equipment had a useful life of eight years. However, aft

On March 1, 2024, a company entered into an agreement with the state to obtain the rights to operate a mineral mine for $6 million. The mine is expected to produce 155,000 tons of mineral. As part of the agreement, the company agrees to restore the land to its original condition after mining operations are completed in approximately five years. Management has provided the following possible outflows for the restoration costs that will occur five years from now: (PV of $1. PVA of $1) Cash Outflow $ 520,000 675,000 830,000 Probability 20% 30% 50% The company's credit-adjusted risk-free interest rate is 9%. During 2024, the company extracted 27,900 tons of ore from the mine. How much accretion expense will the company record in its income statement for the 2024 calendar year? Multiple Choice

Schefter Mining operates a copper mine in Wyoming. Acquisition, exploration, anddevelopment costs totaled $7.3 million. Extraction activities began on July 1, 2024. After thecopper is extracted in approximately six years, Schefter is obligated to restore the land to itsoriginal condition, including constructing a park. The company’s controller has provided thefollowing three cash flow possibilities for the restoration costs:Cash Flow Probability1. $ 610,000 25%2. 710,000 25%3. 810,000 50%The company’s credit-adjusted, risk-free rate of interest is 6%, and its fiscal year ends onDecember 31.Note: Use appropriate factor(s) from the tables provided. Round other intermediatecalculations to the nearest whole dollar. (FV of $1, PV of $1, FVA of $1, PVA of $1,FVAD of $1 and PVAD of $1)Required:1. What is the initial cost of the copper mine?2. How much accretion expense will Schefter report in its 2024 income statement?3. What is the book value of the asset retirement obligation that Schefter…

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, after all 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?

In 2021, the Marion Company purchased land containing a mineral mine for $1,800,000. Additional costs of $920,000 were incurred to develop the mine. Geologists estimated that 400,000 tons of ore would be extracted. After the ore is removed, the land will have a resale value of $120,000. To aid in the extraction, Marion built various structures and small storage buildings on the site at a cost of $208,000. These structures have a useful life of 10 years. The structures cannot be moved after the ore has been removed and will be left at the site. In addition, new equipment costing $109,000 was purchased and installed at the site. Marion does not plan to move the equipment to another site, but estimates that it can be sold at auction for $5,000 after the mining project is completed. In 2021, 70,000 tons of ore were extracted and sold. In 2022, the estimate of total tons of ore in the mine was revised from 400,000 to 499,000. During 2022, 109,000 tons were extracted. Required: 1. Compute…

In 2024, the Marion Company purchased land containing a mineral mine for $1,200,000. Additional costs of $452,000 were incurred to develop the mine. Geologists estimated that 320,000 tons of ore would be extracted. After the ore is removed, the land will have a resale value of $100,000. To aid in the extraction, Marion built various structures and small storage buildings on the site at a cost of $107,200. These structures have a useful life of 10 years. The structures cannot be moved after the ore has been removed and will be left at the site. In addition, new equipment costing $55,200 was purchased and installed at the site. Marion does not plan to move the equipment to another site, but estimates that it can be sold at auction for $4,000 after the mining project is completed. In 2024, 42,000 tons of ore were extracted and sold. In 2025, the estimate of total tons of ore in the mine was revised from 320,000 to 407,500. During 2025, 72,000 tons were extracted, of which 52,000 tons were…

Schefter Mining operates a copper mine in Wyoming. Acquisition, exploration, and development costs totaled $7.5 million. Extraction activities began on July 1, 2024. After the copper is extracted in approximately six years, Schefter is obligated to restore the land to its original condition, including constructing a park. The company's controller has provided the following three cash flow possibilities for the restoration costs: 1. 2. 3. Cash Flow $ 630,000 730,000 830,000 Probability 30% 30% 40% The company's credit-adjusted, risk-free rate of interest is 4%, and its fiscal year ends on December 31. Note: Use appropriate factor(s) from the tables provided. Round other intermediate calculations to the nearest whole dollar. Enter your answers in whole dollars. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. What is the initial cost of the copper mine? 2. How much accretion expense will Schefter report in its 2024 income statement? 3. What is the book…

In 2024, the Marion Company purchased land containing a mineral mine for $1,700,000. Additional costs of $667,000 were incurred to develop the mine. Geologists estimated that 420,000 tons of ore would be extracted. After the ore is removed, the land will have a resale value of $120,000. To aid in the extraction, Marion built various structures and small storage buildings on the site at a cost of $161,700. These structures have a useful life of 10 years. The structures cannot be moved after the ore has been removed and will be left at the site. In addition, new equipment costing $91,200 was purchased and installed at the site. Marion does not plan to move the equipment to another site, but estimates that it can be sold at auction for $3,000 after the mining project is completed. In 2024, 52,000 tons of ore were extracted and sold. In 2025, the estimate of total tons of ore in the mine was revised from 420,000 to 507,500. During 2025, 82,000 tons were extracted, of which 62,000 tons were…