Question

Question 16 (1 point) Clark Oil and Gas incurred costs of $15.3 million for the rights to extract resources from a natural gas deposit. The company expects to extract 8 million cubic feet of natural gas during a six-year period. Natural gas extracted during years 1 and 2 were 800,000 and 1,600,000 cubic feet, respectively. What was total depletion for year 1 and year 2, assuming the company uses the units-of-production method? $5.10 million. $3.06 million $8.00 million $4.59 million. Question 17 (1 point) An activity-based method is most often used to allocate the cost of natural resources over its useful life because! This method generally results in the highest amount of assets in the earlier Uvears. This is the simplest method, and natural resource activity is hard to estimate. The usefulness of natural resources generally is directly related to the amount of the resources extracted This method generally results in the highest amount of assets in the later years Question 18 11 point) Broadway Ltd. purchased equipment on January 1, 2016, for $800,000, estimating a five-year useful life and no residual value. In 2016 and 2017. Broadway depreciated the asset using the straight-line method. In 2018, Broadway changed to sum-of- years-digits depreciation for this equipment. What depreciation would Broadway record for the year 2018 on this equipment? $120.000 $160,000 $200.000 $240,000 Question 19 (1 point) Tatsuo Corporation purchased farm equipment on January 1, 2016, for $280,000. In 2016 and 2017, Tatsuo depreciated the asset on a straight-line basis with an estimated useful life of five years and a $90,000 residual value. In 2018, due to changes in technology. Tatsuo revised the residual value to $30,000 but still plans to use the equipment for the full five years. What depreciation would Tatsuo record for the year 2018 on this equipment? 552.000 558,000 $50,000 $28.000

Answer 1

Answer :

Depletion expense per cubic feet

= Total cost / Total cubic feet

= 15.3 million / 8 million

= $ 1.9125 per cubic feet

Depletion for year 1

= Number of cubic feet extracted * Depletion per cubic feet

= 800,000 * $ 1.9125

= $ 1,530,000

Similarly, depletion for year 2

= 1,600,000 * 1.9125

= $3,060,000

Note As per HOMEWORKLIB RULES we have to answer only one question so please do re-post remaining questions.

Please Upvote Thank You !!!