Reference no: EM132736161

In 2019, ABC Mining Corp. acquired the right to use 1,000 acres of land to mine for gold. The lease cost is Php 200,000,000, and the related exploration costs on the property amounted to Php 40,000,000. It is the policy of ABC Mining Corp. to capitalize all costs of exploration and evaluation of mineral resources. Intangible development costs for drilling, tunnels, shafts, and wells incurred before opening the mine amounted to Php 340,00,000. At the end of the mine's economic useful life, ABC Mining Corp. is required by legislation to restore the site. Estimated restoration costs have a fair value of Php 20,000,000. ABC Mining Corp. estimates that the mine will provide approximately 100,000,000 ounces of gold. Actual ounce of gold mined in 2020 totaled 300,000 ounces.

Problem 1: How much is the depletion charge in 2020?

Problem 2: Assuming that of the 300,000 ounces of gold extracted in 2020, 280,000 ounces were sold and 20,000 ounces remained in inventory. How much depletion is recognized in the (a) statement of financial position and (b) statement of profit or loss and other comprehensive income?