Natural Resources Flashcards
1
Q
What costs related to natural resources should be capitalized?
A
- Acquisition costs
- Exploration costs
- Development costs
2
Q
What are the methods for accounting for exploration costs?
A
- Successful efforts method
2. Full costing method
3
Q
How is depletion for a period determined?
A
Depletion for a period = (depletion rate) x (number of units removed in period)
4
Q
How is depletion rate calculated?
A
Depletion rate = (Natural resources account balance - residual value) / (total estimated units
