Kent Oil, a small Texas oil company, holds huge reserves of oil and gas assets. Assume that at the end of 2014, Kent Oil’s cost of mineral assets totaled approximately $ 18 million, representing 2.4 million barrels of oil and gas reserves in the ground. Calculate Kent Oil’s depletion expense per barrel of oil. Suppose Kent Oil removed 0.8 million barrels of oil during 2015 and sold all of these barrels during the year. Record Kent Oil’s depletion expense for 2015.
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