Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
5th Edition
ISBN: 9780134078939
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Chapter 9, Problem 9.11SE
Accounting for depletion of natural resources
North Coast Petroleum holds huge reserves of oil assets. Assume that at the end of 2016, North Coast Petroleum’s cost of oil reserves totaled $60,000,000,000, representing 5,000,000,000 barrels of oil.
Requirements
1. Which method does North Coast Petroleum use to compute depletion?
2. Suppose North Coast Petroleum removed and sold 900,000,000 barrels of oil during 2017. Journalize depletion expense for 2017.
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Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
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