1) Quantrill Oil Company obtained seismic equipment on January 1, 2021, at a cost of $200,000. The equipment was used in G&G operations for the calendar year 021. The equipment has an estimated useful life of 10 years with a salvage value of $30,000. The company uses the straight-line method in computing depreciation. Record the depreciation for the year 2021.

2) Boomtimes Oil Company leased 900 acres of land on March 14, 2019. The lease calls for Boomtimes to pay an annual delay rental of $8 per acre if drilling hasn't commenced within 3 years. No drilling has occurred March 14, 2022. Boomtimes initially planned on surrendering the lease, however due to the recent upturn in oil prices has decided to pay the delay rental. Record the appropriate journal entry.

3) Groundhog Petroleum had the following transactions in 2022 concerning test-well contributions:

Contracted with Parsons Energy Corporation, agreeing to pay $50,000 if a well was drilled on Parson's lease to a depth of 10,000 feet.

Contracted to pay Proton Oil Company $40,000 if a well being drilled on Proton's property was dry.

Agreed to pay Gaspar Oil Company $100,000 if a well being drilled reached a depth of 7,500 feet.

Results from the above transactions were the following:

Because of mechanical difficulties, the Parson's well was abandoned at 9,500 feet

The Proton well was dry

The Gaspar well was completed as a producer at 12,000 feet.

Prepare entries for the above transactions, assuming Groundhog Petroleum fulfilled its contractual obligations.

4) Arbusta Energy obtained a three-year lease on 2,000 acres on March 1, 2021 that contained a $5 per acre delay rental clause. Drilling operations were started on April 15, 2022 and completed on August 16, 2022. The well, determined to be dry, was plugged and abandoned. No further drilling operations were started during the primary term. All required delay rentals were paid. Give all entries relating to the delay rental requirement.

5) Boomtimes lease of 900 acres is assessed property tax of $780 per year. Record the journal entry for Boomtimes property tax.

6) Black Cloud Oil Company incurred the following costs during 2021:

Began drilling an exploratory-type stratigraphic test well. Incurred $250,000 of IDC.

Began drilling an exploratory-type stratigraphic test well, incurred $400,000 of IDC. And $50,000 in equipment costs.

Began drilling a development-type stratigraphic test well, incurred $500,000 of IDC.

Began drilling a development-type stratigraphic test well, incurred $1,000,000 of IDC and $150,000 in equipment costs

The following results were obtained in late 2021:

The well was determined to be dry.

The well found proved reserves

The well found proved reserves.

The well was determined to be dry.

Prepare the necessary entries.

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Reference:

Book: Petroleum Accounting - 5e

ACCT-6310.701 Energy Accounting

The University of Texas Permian Basin