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How much would be the depletion expense for the first year

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Question - Saturn Corporation, one of the largest mining company, purchased 20 hectares of land for P60,000,000. The company expected to extract 5 million tons of mine from this land over the next 20 years at which time, residual value shall be P3,000,000. The following costs were also incurred related to the mining activities: Successful exploration cost, P5,000,000 and cost of P800,000 for mining equipment. During the first 2 years of the mine's operations, 300,000 tons were mined each year and sold for P80 per ton. How much would be the depletion expense for the first year?

Reference no: EM132600150

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