Stadium Oil Corporation uses the full cost method. Recently, the company acquired a truck costing…

Stadium Oil Corporation uses the full cost method. Recently, the company acquired a truck costing $60,000 with an estimated life of five years (ignore salvage value). The foreman drives the truck to oversee operations on seven leases, all in the same general geographical area but on multiple reservoirs. The foreman keeps a log of his mileage in order to determine how the truck is utilized. Analysis of the log indicated that 1/3 of the mileage driven was related to travel to drilling operations, 1/3 was related to travel to G&G exploration areas, and 1/3 was related to travel to production locations. Total net capitalized costs, including the truck above, are $2,300,000. Proved reserves at the beginning of the year were 300,000 barrels, and production during the year was 30,000 barrels. Stadium amortizes all possible costs

REQUIRED: Give any entries necessary to record depreciation on the truck for the first year that it was in service.


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