Answer:
Debit to Depletion Expense account by $1,200,000
Credit to Accumulated depletion account $1,200,000
Explanation:
Depletion is an estimated cost of a natural resource that is extracted. This resource is expensed as the extraction is made.
Depletion Expenses = $12 million x 2 million tons / 20 million tons = $1.2 million or $1,200,000
Depletion expense is based on ratio of the amount of extraction in period to the total expected resource.
Accumulated depletion account is also maintained as a contra asset account.
