On January 15, 2017, Alaturka Company paid P5,400,000 for property containing natural resource of 2,000,000 tons...

 

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On January 15, 2017, Alaturka Company paid P5,400,000 for property containing natural resource of 2,000,000 tons of ore. The entity is legally required to restore the site after mining operations. The estimated cost of restoring the land after the resource is extracted 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 at a cost of P8,000,000 and such expenditures are charged to mine improvements. Operations began on January 1, 2018 and resources removed totaled 600,000 tons. During 2019, a discovery was made indicating that available resource after 2019 will total 1,875,000 tons. At the beginning of 2019, additional bunk houses were constructed in the amount of P770,000. In 2019, only 400,000 tons were mined because of a strike. Alaturka Company should report depletion for 2019 at P1,560,000 P640,000 O P1,040,00o P776,000 On January 15, 2017, Alaturka Company paid P5,400,000 for property containing natural resource of 2,000,000 tons of ore. The entity is legally required to restore the site after mining operations. The estimated cost of restoring the land after the resource is extracted 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 at a cost of P8,000,000 and such expenditures are charged to mine improvements. Operations began on January 1, 2018 and resources removed totaled 600,000 tons. During 2019, a discovery was made indicating that available resource after 2019 will total 1,875,000 tons. At the beginning of 2019, additional bunk houses were constructed in the amount of P770,000. In 2019, only 400,000 tons were mined because of a strike. Alaturka Company should report depletion for 2019 at P1,560,000 P640,000 O P1,040,00o P776,000

Answer rating: 100% (QA)

Answer Cost of resource property P5400000 Add Restoration co... View the full answer