Yakal Exploration Co. purchased in 2012 a property that contained mineral deposit for P4,500,000.Estimated recovery was P1,000,000 metric tons of deposits. Development costs P150,000 were also incurred in the same year. The mining property was expected to be worth P600,000 after the mineral deposits had all be removed. During 2013, the company extracted and sold 100,000 metrictons of minerals. Further development costs of P75,000 were incurred in 2014, and the estimate of total recoverable deposits (including the amount extracted in 2013) was revised to 925,000 metrictons. During 2014, the company recovered 150,000 metric tons. The depletion for the year 2014 is

a. P603,658

b. P618,750

c. P676,500

d. P750,000

Answer rating: 100% (QA)

Purchase value of deposit P4500000 Add Development Costs P150000 Total Deposit Value P4650000 Deplet... View the full answer