Compute the initial cost

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A coal mining company has owned a mine for the past 5 years. During this time the following tonnage of ore has been removed each year: 25k, 32k, 36k, 30k & 28k tons. The mine is estimated to contain a total of 500k tons of coal. The initial cost of the mine is P12M. If the company has a gross income for this coal of P220 per ton for the first 2 years, and P300 per ton for the last 3 years, a) determine the depletion charge for each year using gross income method, and b) compute for the % of the initial cost that has been written off in the five years.

Reference no: EM133081182

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