Ajax Petroleum holds huge reserves of oil assets. Assume that at the end of 2024, Ajax Petroleums
Question:
Ajax Petroleum holds huge reserves of oil assets. Assume that at the end of 2024, Ajax Petroleum’s cost of oil reserves totaled $27,000,000, representing 3,000,000 barrels of oil.
Requirements
1. Which method does Ajax Petroleum use to compute depletion?
2. Suppose Ajax Petroleum removed and sold 500,000 barrels of oil during 2025. Journalize depletion expense for 2025.
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Step by Step Answer:
1 Unitsofproduction is the method used to compute depletion 2 Depletion per unit Depl...View the full answer
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Related Book For 
Horngrens Accounting The Financial Chapters
ISBN: 9780136162186
13th Edition
Authors: Tracie Miller Nobles, Brenda Mattison
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