Louisiana Oil Company (LOC) paid $3,000,000 fo production is expected to be 10,000 barrels in ye LOC expects to begin selling barrels from its oil in
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![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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F90baae45-0133-4a45-9b52-65260b9c35d9%2Fe6a6a503-3eab-4df6-9a39-9bed5207a9f7%2F6perjf_processed.png&w=3840&q=75)
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