Wasting Assets - PPE

Substantive Procedures

PPE - Property, Plant, and Equipment

1. Obtain Lapsing schedule and reconcile with general ledger.
2. Physically inspecting major acquisition of PPE during the year.
3. Examining proof of ownership and restrictions of PPE.

Wasting Assets
1. Review the depletion policies set forth in company manuals or other management directives.
2. Obtain or prepare a summary analysis of depletion and wasting asset accounts.
3. Perform analytical procedures for depletion.

-
Assertions being checked
P&D E C R&O V

x x
x x
x x

x x
x x
x x x
WP-1
Harruel Mining Corp.
Lead Schedul related to Wasting Assets
December 31, 2024-Audit

PAJE
Account Title Ref Unadjusted Balance Dr Cr

Wasting Assets WP-2 132,355,181 - -

Accumulated depletion - - 17,647,357
Wasting Asset, net 132,355,181 - 17,647,357
Property, Plant, and Equipment 15,000,000 -
Accumulated depreciation - - 2,800,000
PPE, net 15,000,000 - 2,800,000
147,355,181 - 20,447,357

Prepared by: Group 4 - 03/26/2024

Reviewed by:
Audited Balance Prior Year Balance % Change

132,355,181 - -
- 17,647,357 - -
114,707,824 - -
15,000,000 - -
- 2,800,000 - -
12,200,000 - -
126,907,824 - -
WP-2
Harruel Mining Corp.
Roll Forward Schedule related to Wasting Assets
December 31, 2024-Audit

Mineral deposit Equipment-movable

Cost
Beginning - January 1, 2024 132,355,181 BS 6,000,000 BS
Additions: - -
Disposals/Retirements - -
Balance at December 31, 2024 132,355,181 6,000,000

Accumulated Depletion and Depreciation

Beginning - January 1, 2024 - -
Depletion and Depreciation 17,647,357 A 1,000,000 A
Disposals/Retirements - -
Balance at December 31, 2024 17,647,357 1,000,000

Net Book Value

As at December 31, 2024 114,707,824 5,000,000

Prepared by: Group 4 - 03/26/2024

Reviewed by:
Equipment-immovable Total

9,000,000 BS 147,355,181 BS
- -
- -
9,000,000 147,355,181

1,800,000 A 20,447,357
- -
1,800,000 20,447,357

7,200,000 126,907,824
 WP-3
Harruel Mining Corp.
PAJE
December 31, 2024- Audit

Accounts Ref Dr
1 Depletion WP-2 17,647,357
Accumulated depletion
to record depletion charge in 2024

2 Depreciation Expense WP-2 1,000,000

Accumulated depreciation- equipment movable
to record depreciation expense for movable equipment in 2024

3 Depreciation Expense WP-2 1,800,000

Accumulated depreciation- equipment immovable
to record depreciation expense for immovable equipment in 2024

4 Interest Expense A 762,622

Asset retirement obligation - restoration cost
to record interest expense in 2024

Prepared by: Group 4 - 03/26/2024

Reviewed by:
 Cr

17,647,357

1,000,000

1,800,000

762,622
Problem 20-11

#1
Acquisition cost of PPE with mineral resources 120,000,000
Add: Exploration and intangible development cost 6,000,000
PV of restoration costs 6,355,181
Initial cost of the mineral deposit 132,355,181

Estimated restoration cost 10,000,000

Multiply by: Present value of 1 for four periods 0.6355
Present value of the restoration cost 6,355,181

#2
Initial cost of the wasting assets 132,355,181
Divided by: Estimated units to be extracted 12,000,000
Depletion per unit 11.03
Multiply by: Units extracted in 2024 1,600,000
Depletion in 2024 17,647,357

#3
Cost of the movable tangible equipment 6,000,000
Divided by: Useful life 6
Depreciation of movable equipement in 2024 1,000,000

#4
Cost of the immovable tangible equipment 9,000,000
Divided by: Useful life 5
Depreciation of immovable equipment in 2024 1,800,000

#5
PV of restoration costs 6,355,181
Multiplied by: Discount rate 12%
Interest Expense in 2024 762,622