FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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4. Arabia Petroleum holds huge reserves of oil. Assume that at the end of 2024, Arabia Petroleum's cost of oil reserves totaled $120,000,000, representing 200,000,000 barrels of oil. Suppose Arabia Petroleum removed and sold 10,000,000 barrels of oil during 2025.
Journalize depletion expense for 2025. (Assume no residual value. Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
Date
Accounts and Explanation
Debit
Credit
To record payment of costs associated with purchase of oil reserves.
To record purchase of oil reserves.
To record depletion.
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Transcribed Image Text:4. Arabia Petroleum holds huge reserves of oil. Assume that at the end of 2024, Arabia Petroleum's cost of oil reserves totaled $120,000,000, representing 200,000,000 barrels of oil. Suppose Arabia Petroleum removed and sold 10,000,000 barrels of oil during 2025. Journalize depletion expense for 2025. (Assume no residual value. Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit To record payment of costs associated with purchase of oil reserves. To record purchase of oil reserves. To record depletion.
4. Arabia Petroleum holds huge reserves of oil. Assume that at the end of 2024, Arabia Petroleum's cost of oil reserves totaled $120,000,000, representing 200,000,000 barrels of oil. Suppose Arabia Petroleum removed and sold 10,000,000 barrels of oil during 2025.
Journalize depletion expense for 2025. (Assume no residual value. Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
Date
Accounts and Explanation
Accumulated Depletion-Oil Reserves
Accumulated Depreciation-Oil Reserves
Cash
Depletion Expense-Oil Reserves
Depreciation Expense-Oil Reserves
Oil Reserves
Debit
Credit
expand button
Transcribed Image Text:4. Arabia Petroleum holds huge reserves of oil. Assume that at the end of 2024, Arabia Petroleum's cost of oil reserves totaled $120,000,000, representing 200,000,000 barrels of oil. Suppose Arabia Petroleum removed and sold 10,000,000 barrels of oil during 2025. Journalize depletion expense for 2025. (Assume no residual value. Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Accumulated Depletion-Oil Reserves Accumulated Depreciation-Oil Reserves Cash Depletion Expense-Oil Reserves Depreciation Expense-Oil Reserves Oil Reserves Debit Credit
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