4. Amplify Petroleum holds huge reserves of oil. Assume that at the end of 2017, Amplify Petroleum's cost of oil reserves totaled $80,000,000, representing 100,000,000 barrels of oil. Suppose Amplify Petroleum removed and sold 20,000,000 barrels of oil during 2018 Journalize depletion expense for 2018. (Assume na residual value. Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Depletion Expense-Oil Reserves Accumulated Depletion-Oil Reserves To record depletion Debit 16,000,000 Credit 16,000,000

4. Amplify Petroleum holds huge reserves of oil. Assume that at the end of 2017, Amplify Petroleum's cost of oil reserves totaled $80,000,000, representing 100,000,000 barrels of oil. Suppose Amplify Petroleum removed and sold 20,000,000 barrels of oil during 2018 Journalize depletion expense for 2018. (Assume na residual value. Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Depletion Expense-Oil Reserves Accumulated Depletion-Oil Reserves To record depletion Debit 16,000,000 Credit 16,000,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Manashukh
Consider a project with the following information: Initial fixed asset investment = $550,000; straight-line depreciation to zero over the 4-year life; zero salvage value; price $54; variable costs = $35; fixed costs = $228,000, quantity sold = 116,000 units; tax rate = 23 percent. How sensitive is OCF to changes in quantity sold? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) AOCFIAQ 9.24
s
Louisiana Oil Company (LOC) paid $3,000,000 for an oil reserve estimated to hold 50,000 barrels of oil. Oil production is expected to be 10,000 barrels in year 1, 30,000 barrels in year 2, and 10,000 barrels in year 3. LOC expects to begin selling barrels from its oil inventory in year 2. Required: Assuming these estimates are accurate, determine the book value of oil reserves at the end of year 1.
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During 2018, Libby Oil and Gas Company completed the last well from its drilling and production platform off the coast of Texas. Unrecovered costs not including decommissioning costs on December 31, 2018, were $25 million, including $5 million in acquisition costs and $20 million in drilling and development costs. Total proved developed reserves were estimated to be 600,000 barrels as of the January 1, 2018. Production during 2018 was 30,000 barrels. At the end of the life of the reservoir, decommissioning costs are estimated to be $14 million, and salvage value is estimated to be $1 million. Required: compute DD&A for 2018.
D1.
Subject: accounting