On 1 April 2013,Ulladulla Mining Ltd assessed that its Mollymook area of interest contained economically recoverable reserves of 50 000 ounces of gold.On the same day the entity installed the following assets: $$\begin{array} { | l | r | r | }
\hline & \text { Cost } & \text { Useful life } \
\hline \text { Mine site building } & \$ 1500000 & 20 \text { years } \
\hline \text { Mining equipment } & 2400000 & 15 \text { years } \
\hline \text { Machineries and equipment (portable) } & 750000 & 8 \text { years } \
\hline
\end{array}$$ The above assets were ready for use on 1 July 2013.Ulladulla Mining Ltd expects to extract the entire reserves in 5 years.For the year ending 30 June 2014 the entity had extracted 5000 ounces of gold.
What is the journal entry to recognise amortisation and depreciation expense of above capitalised developments costs?

Question

On 1 April 2013,Ulladulla Mining Ltd assessed that its Mollymook area of interest contained economically recoverable reserves of 50 000 ounces of gold.On the same day the entity installed the following assets: $$\begin{array} { | l | r | r | } 
\hline & \text { Cost } & \text { Useful life } \
\hline \text { Mine site building } & \$ 1500000 & 20 \text { years } \
\hline \text { Mining equipment } & 2400000 & 15 \text { years } \
\hline \text { Machineries and equipment (portable) } & 750000 & 8 \text { years } \
\hline
\end{array}$$ The above assets were ready for use on 1 July 2013.Ulladulla Mining Ltd expects to extract the entire reserves in 5 years.For the year ending 30 June 2014 the entity had extracted 5000 ounces of gold.
What is the journal entry to recognise amortisation and depreciation expense of above capitalised developments costs?

Quizplus · Accepted Answer

The Answer of On 1 April 2013,Ulladulla Mining Ltd assessed that its Mollymook area of interest contained economically recoverable reserves of 50 000 ounces of gold.On the same day the entity installed the following assets: $$\begin{array} { | l | r | r | } 
\hline & \text { Cost } & \text { Useful life } \
\hline \text { Mine site building } & \$ 1500000 & 20 \text { years } \
\hline \text { Mining equipment } & 2400000 & 15 \text { years } \
\hline \text { Machineries and equipment (portable) } & 750000 & 8 \text { years } \
\hline
\end{array}$$ The above assets were ready for use on 1 July 2013.Ulladulla Mining Ltd expects to extract the entire reserves in 5 years.For the year ending 30 June 2014 the entity had extracted 5000 ounces of gold.
What is the journal entry to recognise amortisation and depreciation expense of above capitalised developments costs?

On 1 April 2013,Ulladulla Mining Ltd Assessed That Its Mollymook