Vandeventer Corporation purchased land containing 25.4 million barrels of naphthenic crude oil for $14,732,000. It cost $4,537,000 to prepare the property for production and the residual value is $1,179,000. Compute the annual depletion cost if 4,623,000 barrels were produced during the year. Round depletion cost per unit to the nearest cent.
Vandeventer Corporation purchased land containing 25.4 million barrels of naphthenic crude oil for $14,732,000. It cost $4,537,000 to prepare the property for production and the residual value is $1,179,000. Compute the annual depletion cost if 4,623,000 barrels were produced during the year. Round depletion cost per unit to the nearest cent.
Chapter1: Financial Statements And Business Decisions
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Vandeventer Corporation purchased land containing 25.4 million barrels of naphthenic crude oil for $14,732,000. It cost $4,537,000 to prepare the property for production and the residual value is $1,179,000. Compute the annual depletion cost if 4,623,000 barrels were produced during the year. Round depletion cost per unit to the nearest cent.
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Annual depletion cost:
It is the amount by which the cost of natural resource is depleted over an accounting period.
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