Question

please help

Beauchamp Fuel purchased on all wel bor $400.000. The wel estimated to contain 80.000 barrels, have anayewe, and have no residual sale should be recorded e company extracts A540,000 OB 1.200.000 C. 580,000 OD 312.000 Cho to your

Answer 1

Ans. Option D. $12,000

Calculation:

Cost per barrel = Cost of oil well / Estimated barrels sold

= $400,000 / 80,000

= $5 per barrel

Cost of sales = Cost per barrel * Actual barrels sold

= $5 * 2,400

= $12,000