Arabia Petroleum holds huge reserves of oil assets. Assume that at the end of $2024,$ Arabia Petroleum's cost of oil reserves totaled $$42,000,000,$ representing $7,000,000$ barrels of oil.

Read the requirements.

Requirement $1.$ Which method does Arabia Petroleum use to compule depletion?

Units$-$of$-$production is the method used to compute depletion.

Requirement $2.$ Suppose Arabia Petroleum removed and sold $400,000$ barrels of oil during $2025.$ Journalize depletion expense for $2025.($Assume no residual value. Record debits first, then credits. Select the explanation on the last line of the journal entry table.$)$

Requirements

Which method does Arabia Petroleum use to compute depletion?

Suppose Arabia Petroleum removed and sold $400,000$ barrels of oil during $2025.$ Journalize depletion expense for $2025.$