The following information as of 12/31/06 relates to the first year of operations for Basic Oil Company. From the data, (1) prepare entries and (2) prepare an income statement for Basic Oil Company for 2006, assuming revenue to the company from oil sales is \($200,000.\) Expense lifting costs as lease operating expense.

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Transactions, 2006 *a. Acquisition costs of undeveloped leases ( RI) *b. G&G costs *c. Drilling costs d. Drilling results: Proved reserves Lease A $ 60,000 Lease B $ 30,000 Lease C $ 20,000 60,000 70,000 90,000 200,000 200,000 250,000 Drilling Drilling completed completed Drilling not completed 700,000 bbl dry Proved developed reserves 300,000 bbl (as of 12/31) e. Production 10,000 bbl f. Lifting costs $ 50,000 g. December 31 Recorded DD&A Impaired lease 40% Transactions, 2007 h. Assume on January 2 of the second year (2007) that disaster struck both Lease A and Lease B. Give the entries to record abandonment of Lease A and B. Assume equipment costing $15,000 was salvaged from Lease A. Assume this is not a post-balance sheet event that would give rise to changes in the balance sheets or income statements of previous years.