Blow Out Oil Company owns a 100% WI in Lease A. Lease A is burdened with a
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Blow Out Oil Company owns a 100% WI in Lease A. Lease A is burdened with a 1/6 royalty. During the month of June, a total of 12,000 barrels of oil was produced and sold. Assume the selling price of the oil was $72/bbl and the production tax was 5%.
REQUIRED: Give the entry required to record the sale of the oil for each of the following:
a. The purchaser assumes responsibility for distributing taxes and royalty income.
b. Blow Out Oil Company assumes the responsibility.
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Related Book For 
Fundamentals Of Oil And Gas Accounting
ISBN: 9781593701376
5th Edition
Authors: Charlotte J. Wright, Rebecca A. Gallun
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