Reference no: EM132981866

Question - On January 1, 2020, BYTONRY Corp. acquired property containing mineral resources for P150,000,000. Total cost of exploration and intangible developments costs was P8,000,000. BYTONRY is mandated by the Mining Act to restore the site after 4 years. Based on most reliable measurement, the amount of restoration cost is P12,000,000 and current market-based discount rate is 10 percent. On the same date, BYTONRY acquired movable and immovable tangible PPE. The movable tangible equipment amounted P6,000,000 while the immovable tangible equipment amounted to P9,000,000. Geologists estimate that the total units estimated to be extracted is 12,000,000. It is estimated that 1,500,000 units will be extracted each year during the useful life of the wasting assets.

The movable equipment has a useful life of 20 years while the immovable equipment has an estimated useful life of 10 years.

Actual units extracted in 2020 and 2021 were 1,600,000 and 1,700,000, respectively.

Based on the above data and result of your audit, answer the questions in the succeeding tabs: (Kindly carry all decimal places in the computation)

1. How much is the initial cost of the mineral deposit?

a. 170,000,000

b. 166,196,161

c. 158,196,161

d. 158,000,000

2. How much is the depletion in 2020?

a. 21,066,667

b. 22,666,667

c. 21,159,488

d. 21,092,822

3. How much is the 2020 depreciation of the movable equipment?

a. 800,000

b. 750,000

c. 300,000

d. 1,125,000

4. How much is the 2020 depreciation of the immovable equipment?

a. 900,000

b. 1,200,000

c. 750,000

d. 1,125,000

5. How much is the interest expense in 2020?

a. 1,200,000

b. 0

c. 2,049,040

d. 819,612