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Arabia Petroleum holds huge reserves of oil assets. Assume that at the end of 2024,...

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Accounting

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.
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