7*

Use the following information for the next two questions. Your company, a mining company, bought an exploration rights on July 1, 2020 at an amount of P7,290,000. A total of P4,860,000 included in the purchase price was allocated to copper ore which had remaining estimated reserves of 1,620,000 tons. You company is expecting to extract 15,000 tons of ore a month with an estimated selling price of P50 per ton. You started production immediately after new machines were purchased at P600,000 on July 1, 2020. These machines have estimated useful life of 15 years with scrap value when the ores have been extracted equals to 10% of its cost. These machines become useless to your company after the extractions. Your company operating expense for the year includes depletion expense of P405,000 and depreciation of P40,000 How much is the correct amount of depletion that should be reported in 2020? 1 point P270,000 P495,000 OP315,000 OP540,000 How much is the correct amount of depreciation that should be reported in 2020? 1 point OP50,000 P60.000 P30,000 P20,000