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9. The entity incurred the following in exploring a natural resources on January 1,2021 Acquisition cost of the land P10,000,000 Development cost 5,000,000 Exploration cost 6,000,000 Purchase of equipment 3,000,000 The entity expects to mine a total of 5,000,000 tons of natural gas, it is also estimated that 1,000,000 of natural gas will be extracted every year. The useful life of the equipment is 6 years, the equipment is used over a several project not just in that specific natural resources.   On 2021 the entity extracted 1,500,000 tons of natural gas.                                 How much is the depreciation expense for the year? Group of answer choices 500,000 1,500,000 600,000 900,000

9. The entity incurred the following in exploring a natural resources on January 1,2021 Acquisition cost of the land P10,000,000 Development cost 5,000,000 Exploration cost 6,000,000 Purchase of equipment 3,000,000 The entity expects to mine a total of 5,000,000 tons of natural gas, it is also estimated that 1,000,000 of natural gas will be extracted every year. The useful life of the equipment is 6 years, the equipment is used over a several project not just in that specific natural resources.   On 2021 the entity extracted 1,500,000 tons of natural gas.                                 How much is the depreciation expense for the year? Group of answer choices 500,000 1,500,000 600,000 900,000

College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter18: Accounting For Long-term Assets
Section: Chapter Questions
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9. The entity incurred the following in exploring a natural resources on January 1,2021

Acquisition cost of the land P10,000,000

Development cost 5,000,000

Exploration cost 6,000,000

Purchase of equipment 3,000,000

The entity expects to mine a total of 5,000,000 tons of natural gas, it is also estimated that 1,000,000 of natural gas will be extracted every year. The useful life of the equipment is 6 years, the equipment is used over a several project not just in that specific natural resources.

 

On 2021 the entity extracted 1,500,000 tons of natural gas.

                                How much is the depreciation expense for the year?

Group of answer choices

500,000

1,500,000

600,000

900,000

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