13 E9-17 (Algo) (Supplement 9A) Calculating and Reporting Depletion [LO 9-S1] 2.86/7.14 points awarded Scored Olive Companies (OC) paid $5,760,000 for an oil reserve estimated to hold 90,000 barrels of oil. Oil production is expected to be 14,000 barrels in year 1, 62,000 barrels in year 2, and 14,000 barrels in year 3. Olive Companies expects to begin selling barrels from its oil inventory in year 4. Required: 1. Assuming these estimates prove to be accurate, show the balances in the oil reserve, accumulated depletion, and oil inventory accounts in each of the three years. 2. What effect does this yearly depletion have on the income statement? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assuming these estimates prove to be accurate, show the balances in the oil reserve, accumulated depletion, and oil inventory accounts in each of the three years. Year 1 Year 2 Oil Reserve $ 4,864,000 $ 4,864,000 Accumulated Depletion Oil Reserve, Net 896,000 3,968,000 Oil Inventory 896,000 3,968,000 ☑ 896,000 4,864,000 < Required 1 Year 3 $ 4,864,000 × 4,864,000 × 0 4,864,000 × Required 2 > *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.
13 E9-17 (Algo) (Supplement 9A) Calculating and Reporting Depletion [LO 9-S1] 2.86/7.14 points awarded Scored Olive Companies (OC) paid $5,760,000 for an oil reserve estimated to hold 90,000 barrels of oil. Oil production is expected to be 14,000 barrels in year 1, 62,000 barrels in year 2, and 14,000 barrels in year 3. Olive Companies expects to begin selling barrels from its oil inventory in year 4. Required: 1. Assuming these estimates prove to be accurate, show the balances in the oil reserve, accumulated depletion, and oil inventory accounts in each of the three years. 2. What effect does this yearly depletion have on the income statement? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assuming these estimates prove to be accurate, show the balances in the oil reserve, accumulated depletion, and oil inventory accounts in each of the three years. Year 1 Year 2 Oil Reserve $ 4,864,000 $ 4,864,000 Accumulated Depletion Oil Reserve, Net 896,000 3,968,000 Oil Inventory 896,000 3,968,000 ☑ 896,000 4,864,000 < Required 1 Year 3 $ 4,864,000 × 4,864,000 × 0 4,864,000 × Required 2 > *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.
Chapter1: Financial Statements And Business Decisions
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![13
E9-17 (Algo) (Supplement 9A) Calculating and Reporting Depletion [LO 9-S1]
2.86/7.14
points awarded
Scored
Olive Companies (OC) paid $5,760,000 for an oil reserve estimated to hold 90,000 barrels of oil. Oil production is expected to be
14,000 barrels in year 1, 62,000 barrels in year 2, and 14,000 barrels in year 3. Olive Companies expects to begin selling barrels from
its oil inventory in year 4.
Required:
1. Assuming these estimates prove to be accurate, show the balances in the oil reserve, accumulated depletion, and oil inventory
accounts in each of the three years.
2. What effect does this yearly depletion have on the income statement?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Assuming these estimates prove to be accurate, show the balances in the oil reserve, accumulated depletion, and oil
inventory accounts in each of the three years.
Year 1
Year 2
Oil Reserve
$ 4,864,000
$ 4,864,000
Accumulated Depletion
Oil Reserve, Net
896,000
3,968,000
Oil Inventory
896,000
3,968,000 ☑
896,000
4,864,000
< Required 1
Year 3
$ 4,864,000 ×
4,864,000 ×
0
4,864,000 ×
Required 2 >
*Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc2a1896c-46fc-46db-a11f-1831b712b13c%2F8060b2f6-6d6a-4777-aec8-dea18961dc7b%2Frmzxtlf_processed.png&w=3840&q=75)
Transcribed Image Text:13
E9-17 (Algo) (Supplement 9A) Calculating and Reporting Depletion [LO 9-S1]
2.86/7.14
points awarded
Scored
Olive Companies (OC) paid $5,760,000 for an oil reserve estimated to hold 90,000 barrels of oil. Oil production is expected to be
14,000 barrels in year 1, 62,000 barrels in year 2, and 14,000 barrels in year 3. Olive Companies expects to begin selling barrels from
its oil inventory in year 4.
Required:
1. Assuming these estimates prove to be accurate, show the balances in the oil reserve, accumulated depletion, and oil inventory
accounts in each of the three years.
2. What effect does this yearly depletion have on the income statement?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Assuming these estimates prove to be accurate, show the balances in the oil reserve, accumulated depletion, and oil
inventory accounts in each of the three years.
Year 1
Year 2
Oil Reserve
$ 4,864,000
$ 4,864,000
Accumulated Depletion
Oil Reserve, Net
896,000
3,968,000
Oil Inventory
896,000
3,968,000 ☑
896,000
4,864,000
< Required 1
Year 3
$ 4,864,000 ×
4,864,000 ×
0
4,864,000 ×
Required 2 >
*Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.
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