Question

Question 10 In 20X9 Little Yard Oil, Inc., purchased drilling rights for $1,000,000. At the time, the engineer estimated 20,000 barrels of oil in the field. In 2X10, 4,000 barrels were pumped and in 2X11, 5,000 barrels were pumped. Which entry below is correct? Credit inventory of $200,000 in 20X9 Debit amortization expense of $200,000 in 20X9 Debit depreciation expense of $250,000 in 2X10 Debit cost of goods sold of $200,000 in 2X10 Debit depletion expense of $250,000 in 2X11

Answer 1

27 28 29 (1 Depletion nate. = $.29,000000 20000 $50 / barrel In 2010. Depruation. 4500 4000 = $2coco. In 2011 Depreciahon & Sux Svoo = $ 250000 Correct answer is di Debit Depletion expense of $ 250000 m 2011