Mod 5
sheyitqan
Problem10-33A.docx
|
Purchase price of oil reserves |
|
$ 6,200,000 |
|
Add related costs: |
|
|
|
Geological tests |
|
|
|
Drilling preparation |
|
|
|
Total cost of oil reserves |
|
|
|
|
|
|
|
Depletion per unit |
= |
(Cost – Residual value) / Estimated total units |
|
|
= |
($7,200,000 ̶ $0) / 500,000 barrels |
|
|
= |
$14.40 per barrel |
|
|
|
|
|
Depletion expense |
= |
Depletion per unit × Number of units extracted |
|
|
= |
|
|
|
= |
|
|
|
|
|
