North Coast Petroleum holds huge reserves of oil assets. Assume that at the end of 2024, North Coast Petroleum's cost of oil reserves totaled $60,000,000, representing 6,000,000 barrels of oil. Read the requirements. -C Requirement 1. Which method does North Coast Petroleum use to compute depletion? is the method used to compute depletion. Requirement 2. Suppose North Coast Petroleum removed and sold 900,000 barrels of oil during 2025. Journalize depletion expense for 2025. (Assume no residual value. Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Units-of-production Debit Credit

North Coast Petroleum holds huge reserves of oil assets. Assume that at the end of 2024, North Coast Petroleum's cost of oil reserves totaled $60,000,000, representing 6,000,000 barrels of oil. Read the requirements. -C Requirement 1. Which method does North Coast Petroleum use to compute depletion? is the method used to compute depletion. Requirement 2. Suppose North Coast Petroleum removed and sold 900,000 barrels of oil during 2025. Journalize depletion expense for 2025. (Assume no residual value. Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Units-of-production Debit Credit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Depletion On January 2, 2019, Whistler Company purchased land for $480,000, from which it is estimated that 370,000 tons of ore could be extracted. It estimates that the present value of the cost necessary to restore the land is $89,000, after which it could be sold for $29,000. During 2019, Whistler mined 85,000 tons and sold 56,000 tons. During 2020, Whistler mined 110,000 tons and sold 111,000 tons. At the beginning of 2021, Whistler spent an additional $90,000, which increased the reserves by 65,000 tons. In 2021, Whistler mined 154,000 tons and sold 160,000 tons. Whistler uses a FIFO cost flow assumption. Required: If required, round the depletion rate to the nearest cent and round the final answers to the nearest dollar. Question Content Area 1. Calculate the depletion included in the income statement and ending inventory for 2019, 2020, and 2021. 2019 Depletion deducted from income $fill in the blank d2d600ff0fa6007_1 Depletion included in inventory $fill in the…
Prime Petroleum Inc. is considering an acquisition of a new production facility in order to expand production ofit its main product, a gasoline additive Gas Gain. The cost of construction (first cost) is $9,000,000. The annualoperating cost is projected to be $700,000. The facility will be liquidated in 24 years, resulting in a salvage valueinflow of $2,000,000. Assuming MARR of 4%, compute the annual worth of the project's cash flows, and type inyour answer expressed as a cost (do not include negative sign with your answer
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.
Depletion On January 2, 2019, Whistler Company purchased land for $530,000, from which it is estimated that 360,000 tons of ore could be extracted. It estimates that the present value of the cost necessary to restore the land is $68,000, after which it could be sold for $31,000. During 2019, Whistler mined 73,000 tons and sold 62,000 tons. During 2020, Whistler mined 93,000 tons and sold 89,000 tons. At the beginning of 2021, Whistler spent an additional $110,000, which increased the reserves by 60,000 tons. In 2021, Whistler mined 132,000 tons and sold 137,000 tons. Whistler uses a FIFO cost flow assumption. Required: If required, round the depletion rate to the nearest cent and round the final answers to the nearest dollar. 1. Calculate the depletion included in the income statement and ending inventory for 2019, 2020, and 2021. 2019 Depletion deducted from income $ Depletion included in inventory $4 2020 Depletion deducted from income $ Depletion included in inventory $4 2021…
D1.
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.
Depletion On January 2, 2019, Whistler Company purchased land for $430,000, from which it is estimated that 350,000 tons of ore could be extracted. It estimates that the present value of the cost necessary to restore the land is $74,000, after which it could be sold for $28,000. During 2019, Whistler mined 79,000 tons and sold 63,000 tons. During 2020, Whistler mined 97,000 tons and sold 95,000 tons. At the beginning of 2021, Whistler spent an additional $90,000, which increased the reserves by 53,000 tons. In 2021, Whistler mined 144,000 tons and sold 134,000 tons. Whistler uses a FIFO cost flow assumption. Required: If required, round the depletion rate to the nearest cent and round the final answers to the nearest dollar. 1. Calculate the depletion included in the income statement and ending inventory for 2019, 2020, and 2021. 2019 Depletion deducted from income Depletion included in inventory $ 2020 Depletion deducted from income Depletion included in inventory $ 2021 Depletion…