Foundation Oil Company owns a working interest in the Carpenter Lease in Texas. The lease is burdened
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Foundation Oil Company owns a working interest in the Carpenter Lease in Texas. The lease is burdened with a 3/16 royalty interest. During February, a total of 3,000 barrels of oil is sold at $66/bbl to a refinery owned 100% by Foundation Oil. Assume the severance tax rate is 5% in Texas.
REQUIRED: Prepare entries for the producer and the refinery purchaser.
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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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