Glick Company purchased oil rights on July 1, Year 1 for $2,800,000. A total of 200,000 barrels of oil are expected to be extracted over the assets life, and 50,000 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? (Do not round intermediate calculations.):
A decrease in stockholders' equity of $200,000.
A decrease in assets of $500,000.
A decrease in assets of $700,000.
An increase in stockholders' equity of $740,000.
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