Recognition of depletion expense


Problem:

A company purchased oil rights on July 1, 2008 $1,200,000. If 200,000 barrels of oil are expected to be extracted over the assets life, and 30,000 barrels are extracted and sold in 2008, the recognition of depletion expense on December 31, 2008 would cause what?

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Accounting Basics: Recognition of depletion expense
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