Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Theta Ltd is a public company listed on the Australian Securities Exchange (ASX). It currently operates in one area of interest - Beta Beta Area

image text in transcribed
Theta Ltd is a public company listed on the Australian Securities Exchange (ASX). It currently operates in one area of interest - Beta Beta Area of Interest: Beta is located in Western Queensland. On 1 January 2019, Theta Ltd acquired a 28-year lease on a mining property in the Beta Area of Interest for $54 million and during 2019 spent $4 050 000 developing the property. In addition to the development costs. Theta Ltd incurred the folowing construction costs: Item Cost Estimated life Railroad and associated equipment 58 100 000 35 years Other mine equipment 2 600 000 10 years The railroad and associated equipment cannot be moved to another site and will have a residual value of zero once the ore deposit is fully depleted. The other mine equipment can be dismantled and used at another mine site. The other mine equipment has an estimated residual value of zero at the end of its estimated useful life. Production at the Beta property commenced on 1 January 2021. In late December 2020. company geologists estimated that the mining property would produce 112.5 million tonnes of ore and it is assumed that the property will have a residual value of $450 000 after the ore deposit is exhausted A summary of activities for the year ended 31 December 2021 is as follows: Production and sales (in tonnes): Tonnes of ore mined 4 500 000 Tonnes of ore sold at $12 per tonne) 4 050 000 Revenues and costs: Production costs (excluding depreciation and amortisation $13 500 000 Administration expenses $1 800 000 Selling expenses $810 000 Income tax expense $6 750 000 The financial year for Theta Ltd is from 1 January to 31 December. REQUIRED: 1. Calculate the production cost per tonne for the year ended 31 December 2021. Show all working and provide any explanations necessary to support your answer. (Please round your answer to 4 decimal places). 2. What is the gross profit reported for the year ended 31 December 2021? 3. What is the net profit after tax reported for the year ended 31 December 2021

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Survey of Accounting

Authors: Thomas P. Edmonds, Frances M. McNair, Philip R. Olds, Bor Yi

3rd Edition

978-1259683794, 77490835, 1259683796, 9780077490836, 978-0078110856

Students also viewed these Accounting questions