Use the same facts as problem 20 and prepare entries using the following independent assumptions: a. Lease

Question:

Use the same facts as problem 20 and prepare entries using the following independent assumptions:

a. Lease A is abandoned in 2022.

b. Lease A is proved in 2022.

c. Insignificant Lease Y, with a cost of $3,000, is abandoned.

d. Insignificant Lease X, with a cost of $5,000, is proved.

Data From Problem 20:-

Solar Energy Corporation has the following account balances at 12/31/21:

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REQUIRED:

Prepare entries to record impairment.

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Fundamentals Of Oil And Gas Accounting

ISBN: 9781593703639

6th Edition

Authors: Charlotte Wright

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Question Posted: Mar 31, 2024 01:00 AM

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Use the same facts as problem 20 and prepare entries using the following independent assumptions: a. Lease

Question:

Unproved property-Lease A Unproved property-group... Allowance for impairment, group. $ 80,000 220,000 12,000 At 12/31/21, Lease A is considered to be 40% impaired. Solar Energy's estimated abandonment rate of insignificant unproved properties is 60% (i.e., the impairment rate is 60%).

Step by Step Answer:

To record impairment for the independent assumptions provided we need to adjust the account balances ...View the full answer

Fundamentals Of Oil And Gas Accounting

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