E$9-17($Algo$)($Supplement $9$A$)$ Calculating and Reporting Depletion $[$LO $9-$S$1]$

Mica Manufacturing $($MM$)$ paid $$2,750,000$ for an oil reserve estimated to hold $50,000$ barrels of oil. Oil production is expected to be $14,000$ barrels in year $1,22,000$ barrels in year $2,$ and $14,000$ barrels in year $3.$ Mica Manufacturing expects to begin selling barrels from its oil inventory in year $4.$

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Required:

Assuming these estimates prove to be accurate, show the balances in the oil reserve, accumulated depletion, and oil inventory accounts in each of the three years.

What effect does this yearly depletion have on the income statement?