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Big Oil Company acquired an interest in a lease by paying a lease bonus of $80,000.Big drilled a productive well and deducted the IDC.An engineering
Big Oil Company acquired an interest in a lease by paying a lease bonus of $80,000.Big drilled a productive well and deducted the IDC.An engineering report on January 1 estimated the reserves at 30,000 barrels of oil.During the year, 1,000 barrels of oil were produced and sold for $70,000.Big Oil expenses for the production of the oil were $32,000.What is Big Oil's allowable depletion?
$10,500
$12,000
$38,000
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