On January 1, 2015, Lord Company purchased land with valuable natural ore deposits for P5,000,000. The residual value of the land was P1,000,000. At the time of purchase, a geological survey estimated a recoverable output of 2,000,000 tons. Early in 2015, roads were constructed on the land to aid in the extraction and transportation of the minded ore at a cost of P800,000. In 2015, 250,000 tons were minded and tons of ore available for mining. In 2016, 400,000 were mined and sold. What amount should be recognized as depletion expense for 2016? Choices: a. 600,000 b. 960,000 c. 672,000 d. 800,000

On January 1, 2015, Lord Company purchased land with valuable natural ore deposits for P5,000,000. The residual value of the land was P1,000,000. At the time of purchase, a geological survey estimated a recoverable output of 2,000,000 tons. Early in 2015, roads were constructed on the land to aid in the extraction and transportation of the minded ore at a cost of P800,000. In 2015, 250,000 tons were minded and tons of ore available for mining. In 2016, 400,000 were mined and sold. What amount should be recognized as depletion expense for 2016? Choices: a. 600,000 b. 960,000 c. 672,000 d. 800,000

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Description: On January 1, 2015, Lord Company purchased land with valuable natural ore deposits for P5,000,000. The residual value of the land was P1,000,000. At the time of purchase, a geological survey estimated a recoverable output of 2,000,000 tons. Early in

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 29CE

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