1. On January 1, 2018, Samar Company paid P5,300,000 for property containing natural resource of 2,000,000 tons of ore. The present value of the estimated cost of restoring the land after the resource is extracted is P550,000 and the land will have a value of P650,000 after it is restored for suitable use. Tunnels, bunk houses, and other fixed installations are constructed at a cost of P8,000,000 and such expenditures are charged to mine improvements. Operations began on January 1, 2019 and resources removed totaled 600,000 tons. During 2020, a discovery was made indicating that available resource after 2020 will total 1,875,000 tons. At the beginning of 2020, additional bunk houses were constructed in the amount of P770,000. In 2020, only 400,000 tons were mined because of a strike. What is the depreciation rate per unit for 2020? *

a. 1.80

b. 2.60

c. 2.80

d. 2.90

2. On January 1, 2019, Burns Company acquired a land lease for 21 years with no option to renew. The lease required the lessee to construct a building in lieu of rent. The building, completed on January 1, 2020, at a cost of P12,600,000, is depreciated using the straight line method. At the end of the lease, the buildings estimated fair value is P8,400,000. The useful life of the building is 25 years. What is the amount of Depreciation for 2020?

a. 210,000

b. P 504,000

c. P11,970,000

d. P 630,000

3.) Trixy Company determined that, due to the obsolescence, equipment with an original cost of P180,000 and accumulated depreciation at January 1, 2020 of P84,000 had suffered permanent impairment, and as a result should have a fair value of only P60,000 as of the beginning of the year. Additionally, the remaining useful life of the equipment was reduced from eight years to two years. In its December 31, 2020 Income statement, how much should be reflected as Depreciation?

a.20,000

b. 30,000

c. 104,000

d. 120,000