Question: Accounting for natural resources Ernest Oil, Inc. has an account titled Oil and Gas Properties. Ernest paid $6,200,000 for oil reserves holding an estimated 400,000 barrels of oil. Assume the company paid $590,000 for additional geological tests of the property and $470,000 to prepare for drilling. During the first year, Ernest removed and sold 72,000 barrels of oil. Record all of Ernest's transactions, including depletion for the first year.