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A company spent $2.0 million drilling an oil well in April and began to produce oil from that well in early May. The well has
A company spent $2.0 million drilling an oil well in April and began to produce oil from that well in early May. The well has no residual value and is expected to produce 50,000 barrels over its useful life of 10 years. The well is not connected to a pipeline, so the oil produced is stored in a tank and picked up by truck. Because a truck cannot get to the well at certain times during the year, production at the site can be sporadic. For the year ended December 31, the well produced 2,500 barrels.
Calculate the depletion for the current year?
Depletion for the current year |
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