Answer:
$65,200,000.
Explanation:
We know,
Depreciation expense rate under unit-of-activity method = (Total cost of the asset - Residual value) ÷ Estimated usage
Therefore, Depreciation expense rate = ($80,000,000 - 0) ÷ 20,000,000 barrels of oil.
Depreciation expense rate = $80,000,000 ÷ 20,000,000 barrels of oil.
Depreciation expense rate = $4 per barrel.
As the company used 1,800,000 barrels during 2019, the depreciation expense for 2019 = 1,800,000 × $4 = $72,000,000
For 2020, the depreciation expenses = 1,900,000 × $4 = $76,000,000
Therefore, accumulated depreciation after December 31, 2020 = $72,000,000 + $76,000,000 = $14,800,000.
Therefore, book value reported on the balance sheet as of December 31, 2020 = $80,000,000 - $14,800,000 = $65,200,000.
