Chapter 9, Problem 9.11SE

1.

To determine

Depletion: It refers to the process of proportionately distributing the cost of the extracting natural resources such as coal, mines, and petroleum from the earth to the number of units extracted. The following is the formula to calculate the depletion expense:

$\text{Depletion Cost per Unit }=\frac{\text{Cost of the asset }-\text{ Residual value}}{\text{Estimated Number of Units}}$

$\text{Depletion Expense}=\left(\begin{array}{l}\text{Depletion Cost per Unit }\\ \times \text{ Number of units Extracted and Sold}\end{array}\right)$

To mention: the name the method that T Petroleum Company uses to compute the depletion.

2.

To determine

To journalize: the depletion expense for the year 2019 for A Petroleum Company.