PROBLEM NO. 5 MINA MINING CO. has acquired a track of mineral land for P27000000. Mina Mining estimates that the acquired property will yield 120,000 tons of ore with sufcient mineral content to make mining and processing profitable. It further estimates that 6000 tons of ore will be mined the first and last year and 12000 tons every year in between. (Assume 11 years of mining operations.) The land will have a residual value of P900000. Mina Mining builds necessary structures and sheds on the site at a total cost of P1080000. The company estimates that these structures can be used for 15 years but. because they must be dismantled if they are to be moved. they have no residual value. Mina Mining does not intend to use the buildings elsewhere. Mining machinery installed at the mine was purchased secondhand at a total cost of P1000000. The machinery cost the former owner P4000000 and was 50% depreciated when purchased. Mina Mining estimates that about half of this machinery will still be useful when the present mineral resources have been exhausted but that dismantling and removal costs will just about offset its value at that time. The company does not intend to use the machinery elsewhere. The remaining machinery will last until about one-half the present estimated mineral ore has been removed and will then be worthless. Cost is to be allocated equally between these two classes of machinery. 21. What are the estimated depletion and depreciation charges for the first year? Depletion Depreciation A. 132,610,000 P189000 B. P1005000 P378000 C. P2010000 P234000 n D1 1m: nnn D1 no nnn