Accumulated depletion is appearing on 1065 balance sheet, when customer has no basis in depletable assets? How do I correct?

[rahmoellercpa-gm]

This is my first year completing the return for the customer. Prior preparer did not input information using oil and gas schedule. The depletion amount is being properly calculated for the working interest, but is appearing on the balance sheet Sch M-1 and M-2, even though depletion is in excess of basis.

[sjrcpa]

Is percentage depletion being calculated instead of cost depletion?

M-1 and M-2 are not the Balance Sheet.

[PhoebeRoberts]

Balance Sheet, Miscellaneous. Enter a -1 for book depletion, about halfway down.

[rahmoellercpa-gm]

Percentage depletion is being calculated, as the customer does not have any basis for cost depletion based on the type of oil lease. The percentage depletion is then flowing to schedule M-1 and M-2 in turn affecting the capital account balance.