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20 11 Wasting Assets
20 11 Wasting Assets
20 11 Wasting Assets
Substantive Procedures
Wasting Assets
1. Review the depletion policies set forth in company manuals or other management directives.
2. Obtain or prepare a summary analysis of depletion and wasting asset accounts.
3. Perform analytical procedures for depletion.
-
Assertions being checked
P&D E C R&O V
x x
x x
x x
x x
x x
x x x
WP-1
Harruel Mining Corp.
Lead Schedul related to Wasting Assets
December 31, 2024-Audit
PAJE
Account Title Ref Unadjusted Balance Dr Cr
132,355,181 - -
- 17,647,357 - -
114,707,824 - -
15,000,000 - -
- 2,800,000 - -
12,200,000 - -
126,907,824 - -
WP-2
Harruel Mining Corp.
Roll Forward Schedule related to Wasting Assets
December 31, 2024-Audit
9,000,000 BS 147,355,181 BS
- -
- -
9,000,000 147,355,181
1,800,000 A 20,447,357
- -
1,800,000 20,447,357
7,200,000 126,907,824
WP-3
Harruel Mining Corp.
PAJE
December 31, 2024- Audit
Accounts Ref Dr
1 Depletion WP-2 17,647,357
Accumulated depletion
to record depletion charge in 2024
17,647,357
1,000,000
1,800,000
762,622
Problem 20-11
#1
Acquisition cost of PPE with mineral resources 120,000,000
Add: Exploration and intangible development cost 6,000,000
PV of restoration costs 6,355,181
Initial cost of the mineral deposit 132,355,181
#2
Initial cost of the wasting assets 132,355,181
Divided by: Estimated units to be extracted 12,000,000
Depletion per unit 11.03
Multiply by: Units extracted in 2024 1,600,000
Depletion in 2024 17,647,357
#3
Cost of the movable tangible equipment 6,000,000
Divided by: Useful life 6
Depreciation of movable equipement in 2024 1,000,000
#4
Cost of the immovable tangible equipment 9,000,000
Divided by: Useful life 5
Depreciation of immovable equipment in 2024 1,800,000
#5
PV of restoration costs 6,355,181
Multiplied by: Discount rate 12%
Interest Expense in 2024 762,622