Depletion of Natural Resources Brandon Oil Company recently purchased oil and natural gas reserves in a remote part of Alaska for $800,000. Brandon spent $10,000,000 preparing the oil for extraction from the ground. Brandon estimates that 120,000,000 barrels of oil will be extracted from the ground. The land has a residual value of $20,000. During the year, 14,750,000 barrels are extracted from the ground. Required: Calculate the amount of depletion taken in the current year. (Note: In your calculations, round depletion per barrel to two decimal places.)
Depletion of Natural Resources Brandon Oil Company recently purchased oil and natural gas reserves in a remote part of Alaska for $800,000. Brandon spent $10,000,000 preparing the oil for extraction from the ground. Brandon estimates that 120,000,000 barrels of oil will be extracted from the ground. The land has a residual value of $20,000. During the year, 14,750,000 barrels are extracted from the ground. Required: Calculate the amount of depletion taken in the current year. (Note: In your calculations, round depletion per barrel to two decimal places.)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 19E
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![Depletion of Natural Resources
Brandon Oil Company recently purchased oil and natural gas reserves in a remote part of Alaska for $800,000. Brandon spent $10,000,000 preparing the oil for extraction
from the ground. Brandon estimates that 120,000,000 barrels of oil will be extracted from the ground. The land has a residual value of $20,000. During the year,
14,750,000 barrels are extracted from the ground.
Required:
Calculate the amount of depletion taken in the current year. (Note: In your calculations, round depletion per barrel to two decimal places.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc64958d2-5ad2-4336-831c-2d892ca66af5%2Ff9c2c256-10e7-4539-96c2-0c78c1e5544c%2Fvy6p29n_processed.png&w=3840&q=75)
Transcribed Image Text:Depletion of Natural Resources
Brandon Oil Company recently purchased oil and natural gas reserves in a remote part of Alaska for $800,000. Brandon spent $10,000,000 preparing the oil for extraction
from the ground. Brandon estimates that 120,000,000 barrels of oil will be extracted from the ground. The land has a residual value of $20,000. During the year,
14,750,000 barrels are extracted from the ground.
Required:
Calculate the amount of depletion taken in the current year. (Note: In your calculations, round depletion per barrel to two decimal places.)
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