Mineco ltd has operated a gold mine in the interior of jungleco land owned by the kuks trbe. it has been the policy of mineco to capitalize all exploration and evaluation costs on an area of interest basis. Mineco’s record reveals the following incurred cost during a period in relation to a specific area of interest. $
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1.hire of drilling equipment’s including goods and service tax $1000 11,000
2. Mineco’s ltd non-executive director’s fees paid during the period $320,000
3. Cash paid to acquire seismic study from government that is selling for the area, goods and service tax – exempted $6000
4. contractor’s fee for lab our to set up the fencing include goods and service tax 100 $1100
5. Salary of project manager hired specifically to manage the exploration and evaluation activities in the area $120,000
6.Contractor fees for exploratory drilling, including goods and service tax of $5000 $55,000
7. Stationary and other office supplies used by the project manager,including goods and service tax $60 $660
8. Cash paid to acquire exploration rights from the area from the government, goods and service tax exempted $20,000
9.Cash paid to acquire fencing materials to mark – out the area of interest including goods and service tax of $160 $1760 Required: Determine the amount of the exploration and evaluation asset to be capitalized by Mineco ltd in relation to area of interest kuks tribal land. Get Finance homework help today
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