Accounting for depletion of natural resources

Reference no: EM131819921

Question: Accounting for depletion of natural resources South Shore Petroleum holds huge reserves of oil assets. Assume that at the end of 2016, South Shore Petroleum's cost of oil reserves totaled $72,000,000,000, representing 9,000,000,000 barrels of oil.

Requirements: 1. Which method does South Shore Petroleum use to compute depletion?

2. Suppose South Shore Petroleum removed and sold 400,000,000 barrels of oil during 2017. Journalize depletion expense for 2017.

Reference no: EM131819921

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