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An oil well cost $1,802,500 and is calculated to hold 160,000 barrels of oil. There is...

An oil well cost $1,802,500 and is calculated to hold 160,000 barrels of oil. There is no residual value. Which journal entry is needed to record the expense for the extraction of 31,000 barrels of oil during the​ year? All 31,000 barrels were sold during the year.​ (Round any intermediate calculations to the nearest​ cent, and your final answer to the nearest​ dollar.)

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the problem is bassed on calculation of cost of oil extracted which can be done using a method of depreciation which is depletion method which is commnly used for mines model problems first of all we shall calculate the cost per barrell cost per barrell-total cost of the barrel-salvage value its capacity to barrel 1802500 160000 $11.27 per barrel (rounded off to nearest cent) cost for 31000 barrel is 31000 barrel $11.27 31000 11.27 349370 total depletion cost for the year is $349370 journal entry is as follows, Depletion expense a/c dr to oil barrel/(asset) a/c $349370 $349370

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