Question

On January 1, 2010, USA Oil Corporation purchased the rights to an offshore oil well for $55,000,000. The company expects the oil well to produce 10,000,000 barrels of oil during its life. During 2010, USA Oil removed 675,000 barrels of oil.
1. How much depletion should USA Oil Corporation record for 2010?
2. What is the book value of the oil rights at December 31, 2010, the end of the fiscal year?



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  • CreatedSeptember 01, 2014
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