An oil well cost $1,852,500 and is calculated to hold 230,000 barrels of oil. Th

Question

An oil well cost $1,852,500 and is calculated to hold 230,000 barrels of oil. There is no residual value. Which journal entry is needed to record the expense for the extraction of 30,000 barrels of oil during the year? All 30,000 barrels were sold during the year, (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.) 0 A. Oil Reserve Inventory O B. Depletion Expense-Oil Reserve ° C. Cost of Goods Sold-Oil Reserve 0 D. Depletion Expense-Oil Reserve 241,500 Accumulated Depletion Accumulated Depletion Accumulated Depletion Oil Reserve Oil Reserve Oil Reserve 241,500 241,500 241,500 241,500 241,500 241,500 Oil Revenue 241,500

Explanation / Answer

The answer is C

Depletion expenses- Oil reserve a/c $241,500 Accumulated Depletion - Oil Reserve a/c $241,500

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