In 2012,Hamblen Enterprises purchased an oil well for $24,000,000.It is estimated that 160,000,000 barrels can be extracted from the well.Depletion expense during 2013,when 4,000,000 barrels were extracted and sold,totaled

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The depletion expense is calculated by dividing the purchase cost by the total estimated barrels and then multiplying by the number of barrels extracted. ($24,000,000 / 160,000,000 barrels) * 4,000,000 barrels = $600,000.

In 2012,Hamblen Enterprises Purchased an Oil Well for $24,000,000