4. Amplify Petroleum holds huge reserves of oil. Assume that at the end of 2017, Amplify Petroleum's cost of oil reserves totaled $80,000,000, representing 100,000,000 barrels of oil. Suppose Amplify Petroleum removed and sold 20,000,000 barrels of oil during 2018 Journalize depletion expense for 2018. (Assume na residual value. Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Depletion Expense-Oil Reserves Accumulated Depletion-Oil Reserves To record depletion Debit 16,000,000 Credit 16,000,000

4. Amplify Petroleum holds huge reserves of oil. Assume that at the end of 2017, Amplify Petroleum's cost of oil reserves totaled $80,000,000, representing 100,000,000 barrels of oil. Suppose Amplify Petroleum removed and sold 20,000,000 barrels of oil during 2018 Journalize depletion expense for 2018. (Assume na residual value. Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Depletion Expense-Oil Reserves Accumulated Depletion-Oil Reserves To record depletion Debit 16,000,000 Credit 16,000,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

A company is evaluating an investment. The company uses the straight-line method of depreciation. Use the following information to compute the accounting rate of return. Show your calculations and round to one decimal place. Project Investment SR875,000 Residual value 0 Operating income: Year 1 120,000 Year 2 120,000 Year 3 120,000 Year 4 120,000 Year 5 120,000
Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. The investment costs $45,000 and has an estimated $6,000 salvage value. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. Express your answer as a percentage, rounded to two decimal places.
Required Information [The following information applies to the questions displayed below.] Peng Company is considering an investment expected to generate an average net income after taxes of $3,400 for three years. The investment costs $54,900 and has an estimated $10,200 salvage value. Assume Peng requires a 15% return on its investments. Compute the net present value of this investment. Assume the company uses straight-line depreciation. (PV of $1. FV of $1. PVA of $1. and FVA of $1) (Use appropriate factor(s) from the tables provided. Negative amounts should be indicated by a minus sign.) Cash Flow Annual cash flow Residual value Select Chart Net present value Amount x PV Factor = Present Value
An oil well cost $2,090,000 and is calculated to hold 350,000 barrels of oil. There is no residual value. Which journal entry is needed to record the expense for the extraction of 55,000 barrels of oil during the year? All 55,000 barrels were sold during the year. (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar) O A. Depletion Expense - Oil Reserve Accumulated Depletion - Oil Reserve OB. Oil Reserve Inventory Accumulated Depletion - Oil Reserve OC. Cost of Goods Sold - Oil Reserve Accumulated Depletion - Oil Reserve O D. Depletion Expense - Oil Reserve Oil Revenue 328,350 328,350 328,350 328,350 328,350 328,350 328,350 328,350 SICER
A coal mine contains approximately 900,000 tons of this material. The mine cost $13' 500, 000 million. The extraction during 2021, the first year of operations, was 120,000 tons. a) How much is the depletion in 2021? b) Suppose that in 2022 100,000 tons were extracted, what would be the net book value? c) Make the table of the depreciation calculation by the method that corresponds and is adequate to solve this exercise. Could you explain step by step and in detail?, please
Can you show me how to do this one step by step? 11. DEF, Inc. purchased slot machines at the beginning of 2018 for $20,000. The machines have an estimated residual value of $2,000 and an estimated life of five years or 20,000 hours of operation. A. Using straight line depreciation, calculate the total accumulated depreciation at 12/31/19. B. Using units of production depreciation, calculate depreciation expense for 2018. Assume the machines operate at 5,000 ours in 2018. C. Using double declining balance depreciation, calculate the book value of the machine at 12/31/19.
Suppose a manufacturing company bought a machine for RM10,000,000. They have estimated the useful life of the machine to be 8 years with a salvage value of RM2,000,000. a. Calculate the annual depreciation of the asset using the straight-line method. b.Determine the annual depreciation using the double-declining balance method. Use the given table (below) to fill in the book value (beginning of each year), amount of annual depreciation and the book value (end of each the year) Year Book value (beginning of year) Depreciation Book value (end of year) 1 2 3 4 5 6 7 8
Maggie Company expects to extract 20 million tons of coal from a mine that cost $12 million. If no salvage value is expected and 2 million tons are mined in the fırst year, the entry to record depletion will include a: Select one: a. credit to Depletion Expense of $1,200,000. b. The answer does not exist c. debit to Inventory of $1,200,000. d. debit to Accumulated Depletion of $2,000,000. e. credit to Accumulated Depletion of $2,000,000.
Why is 1,500,000 added to 500,000 in getting the units to be extracted in 2020? As well as 800,000 and 1,700,000 in 2021? The formula for depletion says that the denominator is the number of units estimated to be extracted. How come the estimated tons remaining is added too? Kindly explain please.
Required information [The following information applies to the questions displayed below.] Tory Enterprises pays $256,400 for equipment that will last five years and have a $45,400 salvage value. By using the equipment in its operations for five years, the company expects to earn $90,300 annually, after deducting all expenses except depreciation. Calculate annual depreciation expense using double-declining-balance method. Prepare a table showing income before depreciation, depreciation expense, and net (pretax) income for each year and for the total five-year period, assuming double-declining-balance depreciation is used. Complete this question by entering your answers in the tabs below. Depreciation Schedule Calculate annual depreciation expenses using double-declining-balance method. Note: Round Annual Depreciation to the nearest whole dollar. Year Income Computation Year 1 Depreciation for the Period Beginning of Period Book Value O 8 Depreciation Annual Rate 9 Depreciation * prt…
! Required information [The following information applies to the questions displayed below.] On April 1, Cyclone Company purchases a trencher for $288,000. The machine is expected to last five years and have a salvage value of $44,000. Compute depreciation expense at December 31 for both the first year and second year assuming the company uses the straight-line method. Choose Numerator: Year Annual Depreciation First year Second year x × Choose Denominator: Annual Depreciation = Annual depreciation = Fraction of Year = Depreciation Expense = =
1. EX.09.195 Golden Sales has bought $135,000 in fixed assets on January 1st associated with sales equipment. The residual value of these assets is estimated at $10,000 at the end of their 4-year service life. Golden Sales managers want to evaluate the options of depreciation. al. Compute the annual straight-line depreciation. a2. Provide the sample depreciation journal entry to be posted at the end of each of the years. If an amount box does not reguire an entry, leave it blank. Dec. 31 b. Prepare the journal entries for each year of the service life for these assets using the double-declining balance method. If an amount box does not require an entry, leave it blank. Year 1, Dec. 31 Year 2, Dec. 31 Year 3, Dec. 31 Year 4, Dec. 31