Jimmy Acquires an Oil and Gas Property Interest for $600,000

Multiple Choice

Jimmy acquires an oil and gas property interest for $600,000.Jimmy expects to recover 200,000 barrels of oil.Intangible drilling and development costs are $160,000 and are charged to expense.Other expenses are $40,000.During the year,25,000 barrels of oil are sold for $800,000.Jimmy's depletion deduction is

A) $120,000.
B) $75,000.
C) $160,000.
D) $600,000.