Reference no: EM132736744
Question: In connection with your examination of the Celadon Mining Corporation for the year ended December 31, 2020, you noted that the company purchased for P10,400,000 mining property estimated to contain 8,000,000 tons of ore. The residual value of the property is P800,000.
Building used in mine operations costs P800,000 and have estimated life of fifteen years with no residual value. Mine machinery costs P1,600,000 with an estimated residual value of P320,000 after its physical life of 4 years.
Following is the summary of the company's operations for first year of operations.
Tons mined 800,000
tonsTons sold 640,000
tonsUnit selling price per ton P4.40
Direct labor P640,000
Miscellaneous mining overhead P128,000
Operating expenses (excluding depreciation) P576,000
Inventories are valued on a first-in, first-out basis. Depreciation on the building is to be allocated as follows: 20% to operating expenses, 80% to production. Depreciation on machinery is chargeable to production.
Note: Round off per unit information to the nearest centavo. Round off amounts to the nearest peso.
- How much is the depletion for 2020?
- How much is the total inventoriable depreciation for 2020?
- How much is the Inventory as of December 31, 2020?
- How much is the cost of sales for the year ended December 31, 2020?
- How much is the maximum amount that may be declared as dividends at the end of the company's first year of operations?
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