DEPLETION Practice Problems Practice Problems At the beginning of the current year, Vorst Company purchased a mineral mine for P26,400,000 with removable ore estimated at 1,200,000 tons. After it has extracted all the ore, the entity will be required by law to restore the land to its original condition at an estimated cost of P2,100,000. The present value of the estimated restoration cost is P1,800,000. The entity believed that it will be able to sell the property afterwards for P3,000,000. During the current year, the entity incurred P3,600,000 of development cost preparing the mine for production, removed 80,000 tons of ore and sold 60,000 tons. What total amount of depletion should be recorded for the current year? 1,920,000 Practice Problems Catherine Company acquired a coal mine at a cost of P25,000,000. Intangible development costs totaled P6,000,000. After extraction has occurred, the entity must restore the property and the estimated fair value of the obligation is P3,000,000. The property can be sold for P8,500,000 after restoration. The entity estimated that 500,000 tons of coal can be extracted. The entity extracted 90,000 tons in the first year. How much is the depletion expense for the year? 4,590,000 Practice Problems In January 2020, Huff Mining 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 ...
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