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Question: Depletion of Natural Resources
Brandon Oil Company recently purchased oil and natural gas reserves in a remote part of Alaska for $800,000. Brandon spent $10,000,000 preparing the oil for extraction from the ground. Brandon estimates that 120,000,000 barrels of oil will be extracted from the ground. The land has a residual value of $20,000. During 2019, 15, 130,000 barrels are extracted from the ground.
Required: Calculate the amount of depletion taken in 2019. (Note: In your calculations, round depletion per barrel to two decimal places.)
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