Reference no: EM132690367
Question - Use the following information for the next ten items:
Cerulean Mining Company has acquired a tract of mineral land for P50,000,000. Cerulean Mining estimates that the acquired property will yield 150,000 tons of ore with sufficient mineral content to make mining and processing profitable. It further estimates that 7,500 tons of ore will be mined the first and last year and 15,000 tons every year in between. (Assume 11 years of mining operations.) the land will have a residual value of P1,550,000.
Cerulean Mining builds necessary structures and sheds on the site at a total cost of P12,000,000. The company estimated that these structures can be used for 15 years but because they must be dismantled if they are to be moved, they have no residual value. Cerulean Mining does not intend to use the buildings elsewhere.
Mining machinery installed at the mine was purchased secondhand at a total cost of P3,600,000. The machinery cost the former owner P9,000,000 and was 50% depreciated when purchased. Cerulean Mining estimates that about half of this machinery will still be useful when the present mineral resources have been exhausted but the dismantling and removal costs will just offset its value at that time. The company does not intend to use the machinery elsewhere. The remaining machinery will last until about one-half the present estimated mineral ore has been removed and will then be worthless. Cost is to be allocated equally between these two classes of machinery.
Based on the above information, answer the following:
What is the estimated depletion charge for the 1st year?
What is the estimated depreciation charge for the 1st year?
What is the estimated depletion charge for the 5th year?
What is the estimated depreciation charge for the 5th year?
What is the estimated depletion charge for the 6th year?
What is the estimated depreciation charge for the 6th year?
What is the estimated depletion charge for the 7th year?
What is the estimated depreciation charge for the 7th year?
What is the estimated depletion charge for the 11th year?
What is the estimated depreciation charge for the 11th year?
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What is the carrying amount of the mine property
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