Problem 28-3 (IAA) On January 1,2020 Universal Company paid P5,400,000 for property containing natural resource of 2,000,000 tons of ore. The estimated discounted amount of restoring the land after the resource is exhausted is P450,000 and the land will have a value of P650,000 after it is restored for suitable use. Tunnels, bunk houses and other fixed installations are constructed in the amount of P8,000,000. Such expenditures are to be charged to mine improvements. Operations began on January 1,2021 and resources removed totaled 600,000 tons. During 2022, a discovery was made indicating that available resources after 2022 will total 1,875,000 tons. At the beginning of 2022, additional bunk houses were constructed in the amount of P770,000. In 2022, only 400,000 tons were mined because of a strike. Compute the Carrying Amount of Wasting Asset on December 31, 2020.Compute the Depletion on December 31, 2021Compute the Depreciation on December 31, 2021 Compute the Carrying Amount of Wasting Asset on December 31, 2022 Compute the Carrying Amount of Other Asset on December 31, 2022 On January 1, 2020 Universal Company paid P5,400,000 forThe estimated discounted amount of restoring the land afterProblem 28-3 (IAA)(AA)asproperty containing natural resource of 2.000,000 tons OI Ofe:the resource is exhausted is P450.000 and the land will have avalue of P650,000 after it is restored for suitable use.Tunnels, bunk houses and other fixed installations areconstructed in the amount of P8.000,000. Such expendituresare to be charged to mine improvements.Operations began on January 1, 2021 and resources removedtotaled 600,000 tons.During 2022, a discovery was made indicating that availableresources after 2022 will total 1,875,000 tons.At the beginning of 2022, additional bunk houses wereconstructed in the amount of P770,000. In 2022, only 400,000tons were mined because of a strike.

Wasting asset: A resource that depletes gradually over time such as minerals due to extraction or…

Answered: On January 1,2020 Universal Company…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 13P

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Problem 28-3 (IAA) On January 1,2020 Universal Company paid P5,400,000 for property containing natural resource of 2,000,000 tons of ore. The estimated discounted amount of restoring the land after the resource is exhausted is P450,000 and the land will have a value of P650,000 after it is restored for suitable use. Tunnels, bunk houses and other fixed installations are constructed in the amount of P8,000,000. Such expenditures are to be charged to mine improvements. Operations began on January 1,2021 and resources removed totaled 600,000 tons. During 2022, a discovery was made indicating that available resources after 2022 will total 1,875,000 tons. At the beginning of 2022, additional bunk houses were constructed in the amount of P770,000. In 2022, only 400,000 tons were mined because of a strike.

Compute the Carrying Amount of Wasting Asset on December 31, 2020.
Compute the Depletion on December 31, 2021
Compute the Depreciation on December 31, 2021
Compute the Carrying Amount of Wasting Asset on December 31, 2022
Compute the Carrying Amount of Other Asset on December 31, 2022

On January 1, 2020 Universal Company paid P5,400,000 for
The estimated discounted amount of restoring the land after
Problem 28-3 (IAA)
(AA)as
property containing natural resource of 2.000,000 tons OI Ofe:
the resource is exhausted is P450.000 and the land will have a
value of P650,000 after it is restored for suitable use.
Tunnels, bunk houses and other fixed installations are
constructed in the amount of P8.000,000. Such expenditures
are to be charged to mine improvements.
Operations began on January 1, 2021 and resources removed
totaled 600,000 tons.
During 2022, a discovery was made indicating that available
resources after 2022 will total 1,875,000 tons.
At the beginning of 2022, additional bunk houses were
constructed in the amount of P770,000. In 2022, only 400,000
tons were mined because of a strike.

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