A company purchased oil rights on July 1, 2008 $1,200,000. If 200,000 barrels of oil are expected to be extracted over the assets life, and 30,000 barrels are extracted and sold in 2008, the recognition of depletion expense on December 31, 2008 would cause what?© BrainMass Inc. brainmass.com June 3, 2020, 9:48 pm ad1c9bdddf
The depletion amount per barrel is 1,200,000/200,000 = $6 per barrel
In 2008 30,000 barrels are ...
The solution explains the calculation of depletion expense and its impact on the balance sheet.