38

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Question at position 38

1. On February 20, 2021, Kaeya Company incurred cost of P36,000,000 to acquire and prepare to extract an estimated 4,000,000 tons of mineral deposits. The entity mind 500,000 tons of ore in 2021.

On December 31, 2022, Geologists estimated 3,000,000 tons of ore still remained. The entity mined 600,000 tons of ore in 2022.

What amount should be recorded as depletion for 2021?

1. On February 20, 2021, Kaeya Company incurred cost of P36,000,000 to acquire and prepare to extract an estimated 4,000,000 tons of mineral deposits. The entity mind 500,000 tons of ore in 2021.

On December 31, 2022, Geologists estimated 3,000,000 tons of ore still remained. The entity mined 600,000 tons of ore in 2022.

What amount should be recorded as depletion for 2021?

P2,250,000

P3,000,000

P6,000,000

P4,500,000

Question at position 39

39

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Question at position 39

The following are the cost of wasting assets: (a) acquisition cost; (b) exploration cost; (c) development cost and (d) restoration cost.

The following are the cost of wasting assets: (a) acquisition cost; (b) exploration cost; (c) development cost and (d) restoration cost.

True

False

Question at position 40

40

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Question at position 40

When an entity acquires an existing business, it will have to pay not only for the net tangible and identifiable assets but also the goodwill of the business.

When an entity acquires an existing business, it will have to pay not only for the net tangible and identifiable assets but also the goodwill of the business.

True

False

Question at position 41

41

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Question at position 41

Expensed or Capitalized: Cost of materials and services used or consumed in generating the intangible asset.

Expensed or Capitalized: Cost of materials and services used or consumed in generating the intangible asset.

Capitalized

Expensed

Question at position 42

42

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Question at position 42

The straight-line method considers depreciation as a function of usage rather than function of time.

The straight-line method considers depreciation as a function of usage rather than function of time.

True

False