Glick Company purchased oil rights on July 1, Year 1 for $2,400,000. A total of 200,000 barrels of oil are expected to be extracted over the assets life, and 30,000 barrels are extracted and sold in Year 1. Which of the following correctly summarizes the effect of the Year 1 depletion expense on the elements of the financial statements?
A. A decrease in stockholders' equity of $200,000
B. An increase in stockholders' equity of $400,000
C. A decrease in assets of $360,000
D. A decrease in assets of $300,000
Answer: C
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