Bargain Oil, a small Texas oil company, holds huge reserves of oil. Assume that at the end
Question:
Bargain Oil, a small Texas oil company, holds huge reserves of oil. Assume that at the end of 2016, Bargain Oil's cost of oil reserves totaled approximately $14.4 million, representing 1.2 million barrels of oil reserves in the ground.
Requirements
1. Calculate Bargain Oil's depletion expense per barrel of oil.
2. Suppose Bargain Oil removed 220,000 barrels of oil during 2017 and sold all of these barrels during the year. Record Bargain Oil's depletion expense for 2017?
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Depletion expense per barrel of oil 1440000...View the full answer
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