Professional Documents
Culture Documents
In 2019 the entity constructed a road to the gold mine costing P5,000,000. Improvements and other development costs made
P750,000. Because of the improvements to the mine and to the surrounding land, it is estimated that the mine can be sold for
when mining activities are complete.
During 2020, a building was constructed near the mine site to house the mine workers and their families. The total cost of the
P2,000,000 while estimated residual value is P200,000. Geologists estimated that 4,000,000 tons of gold ore could be removed
for refining.
During 2021, the first year of operations, only 500,000 tons of gold ore were removed from the mine.
However, in 2022, workers mined 1,000,000 tons of gold. During that same year, geologists discovered that the mine containe
tons of gold ore in addition to the original 4,000,000 tons. Development costs of P1,300,000 were made to the mine early in 2
the removal of the additional gold. Early in 2022, an additional building was constructed at a cost of P375,000 to house the ad
workers needed to excavate the added gold. This building is not expected to have any residual value.
REQUIRED:
1. DEPLETION FOR 2021
2. DEPLETION FOR 2022
3. DEPRECIATION ON BUILDING FOR 2021
4. DEPRECIATION ON BUILDING FOR 2022
2021
Acquisition cost 50,000
Building 2,000,000
milies. The total cost of the building was Residual value -200,000 1,800,000 Depreciable amount
f gold ore could be removed from the mine
0.45 Deprciation rate