On 1 July 2012 Honies Ltd Commenced an Operation to Extract

question 3

Multiple Choice

On 1 July 2012 Honies Ltd commenced an operation to extract iron ore from two sites believed to have potential in northern Australia.During the financial period ended 30 June 2013 the following costs were incurred. $$\begin{array} { | l | r | r | r | } \hline \text { Site } & \text { Acquisition costs } ( \$ \mathrm {~m} ) & \text { Exploration and evaluation costs (Sm) } & \text { Total(\$m) } \\\hline \text { Western } & 9 & 20 & 29 \\\hline \text { Eastern } & \underline { 5 }& \underline { 15} & \underline { 20 } \\\hline & \underline { 5 } &\underline { 3 5 } & \underline { 49} \\\hline\end{array}$$ The eastern site is found not to be economically viable and is abandoned in the second half of 2013.Development costs of $10 million are incurred at the western site.The reserves at this site are estimated to be 90 000 tonnes.The market price is currently $900 per tonne.In the financial year ended 30 June 2014,10 000 tonnes are extracted with associated production costs of $1 million and 8000 tonnes are sold at the market price.There are no effective limits on the time over which Honies Ltd may extract the ore.What are the journal entries to record the relevant transactions and events for 2013 and 2014 using the full-cost method (round to the nearest $10 000) ?

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Definitions:

Reticular Activating System

A network of neurons located in the brainstem that plays a central role in regulating wakefulness and sleep-wake transitions.

REM Sleep

A stage of sleep characterized by rapid eye movement, vivid dreams, and increased brain activity.

Reticular Formation

A complex network of nerve pathways in the brainstem involved in consciousness and alertness.

EEG Recordings

The measurement of electrical activity in the brain using electrodes placed on the scalp, valuable in diagnosing neurological conditions like epilepsy.