Question
A company purchased an oil well for $200,000. The company estimates that the well contains 50,000 barrels, has a 10-year life, and no salvage value.
A company purchased an oil well for $200,000. The company estimates that the well contains 50,000 barrels, has a 10-year life, and no salvage value. If the company extracts and sells 6,000 barrels of oil in the first year, how much depletion expense should be recorded?
| a. | $16,000 | |
| b. | $24,000 | |
| c. | $20,000 | |
| d. | $100,000 | |
| e. | none of the above |
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Dare To Be Different An Auditors Personal Guide To Excellence
Authors: Daniel Clark
1st Edition
1490772405, 978-1490772400
