An oil well cost $1,782,500 and is calculated to hold 150,000 barrels of oil.There is no residual value.Which journal entry is needed to record the expense for the extraction of 40,000 barrels of oil during the year? All 40,000 barrels were sold during the year.(Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar.)
A)

\begin{array} { | c | r | r | } \hline \text { Cost of Goods Sold - Oil Reserve } & 475,200 & \\\hline \text { Accumulated Depletion - Oil Reserve } & & 475,200 \\\hline\end{array}

\begin{array} { | c | r | r | } \hline \text { Depletion Expense - Oil Reserve } & 475,200 & \\\hline \text { Oil Revenue } & & 475,200 \\\hline\end{array}

\begin{array} { | c | r | r | } \hline \text { Depletion Expense - Oil Reserve } & 475,200 & \\\hline \text { Accumulated Depletion - Oil Reserve } & & 475,200 \\\hline\end{array}

\begin{array} { | c | r | r | } \hline \text { Oil Reserve Inventory } & 475,200 & \\\hline \text { Accumulated Depletion - Oil Reserve } & & 475,200 \\\hline\end{array}

Classify Each of the Following Expenditures as Capital Expenditure (CE)or

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Correct Answer:Verified1.RE; 2.CE...View AnswerUnlock this answer nowGet Access to more Verified Answers free of chargeView Full Answer For Free

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