1. On January 1, 2020, Misnomer Company purchased the land with valuable natural ore deposits for P10,000,000. The residual value of the land was P2,000,000.

At the time of purchase, a geological survey estimated a recoverable output of P4,000,000 tons.

Early in 2020, roads were constructed on the land to aid in the extraction and transportation of the mined ore at a cost of P1,600,000. In 2020, 500,000 tons were mined and sold.

A new survey at the end of 2021 estimated 4,200,000 tons of ore available for mining. In 2021, 800,000 tons were mined and sold.

Prepare journal entries for 2020 and 2021 based on the transactions.

2.