4. Universal Oil Company obtained the rights to shoor 25,000 actes at a cost of 50.20 acre en May 3, 2007. Universal contracted and paid 590,000 for a reconnaissance servey during 2007. As a resalt of this broud exploration study, Lease A and Lease B were leased en lancary 9,2008 . (lgnore acquistion costs) The two properties totaled 1,500 acres, and each had a detay rettal classe requiring a payment of 52 per acre if dritling was not commenced by the end of each full year daring the primury term. Detailed surveys cesting a toeal of $30,000 were done during fanuary and February en the leases. During July, Univerval enlered ieto two test-well coekibution appectikets. a bottombole contribution agreement for $15,000, with a specified depth of 10,000 foet, and a dy bele coetribution of 520.000, alse with a specified depth of 10,000 feet. In November beth wells were drilled to 10.000 feet. The well with the bottom-hole contribution was ruceessful, but the well with the dry hols centribubice was dry. The cost for maintaining land and lease records allocated to these two properties for 2008 was $2,000. Ad valoeem taves were assessed on Universal's economic interest in both properties, amsanting to $2,500 for 2008. After peparing their firuncial satements for 2008, Universal decided to delay dritling on these properties until sometime in 2010 . On April 15, 2010, enough moncy was left after paying taxes for a well to be drilled on Lease B. Befoxe drillies the well, conts of $7.000 were ircurred to suecessfully defend a title suit concerning Lease B. Geve all entries necessury to recoed these transuctions. Assume any necessary delay rental puyments were made 5. Discuss why each party to a test-well contribedion situation woeld enter into the trancestice. 316 Cusswork03-Mod III Ch3 6. Aggic Oil Compamy purchased scismic equipment en Match 1, 2007, conting 5100,000 . The seismic equipment was used in G.6G operations for the remainder of the calendar year, 2007 . Conpute straight-line depreciation for 2007, assaming a 10-ycar life and no salvage valse, and propure the entries to record the purchase and depreciation of the equipment. 4. Universal Oil Company obtained the rights to shoor 25,000 actes at a cost of 50.20 acre en May 3, 2007. Universal contracted and paid 590,000 for a reconnaissance servey during 2007. As a resalt of this broud exploration study, Lease A and Lease B were leased en lancary 9,2008 . (lgnore acquistion costs) The two properties totaled 1,500 acres, and each had a detay rettal classe requiring a payment of 52 per acre if dritling was not commenced by the end of each full year daring the primury term. Detailed surveys cesting a toeal of $30,000 were done during fanuary and February en the leases. During July, Univerval enlered ieto two test-well coekibution appectikets. a bottombole contribution agreement for $15,000, with a specified depth of 10,000 foet, and a dy bele coetribution of 520.000, alse with a specified depth of 10,000 feet. In November beth wells were drilled to 10.000 feet. The well with the bottom-hole contribution was ruceessful, but the well with the dry hols centribubice was dry. The cost for maintaining land and lease records allocated to these two properties for 2008 was $2,000. Ad valoeem taves were assessed on Universal's economic interest in both properties, amsanting to $2,500 for 2008. After peparing their firuncial satements for 2008, Universal decided to delay dritling on these properties until sometime in 2010 . On April 15, 2010, enough moncy was left after paying taxes for a well to be drilled on Lease B. Befoxe drillies the well, conts of $7.000 were ircurred to suecessfully defend a title suit concerning Lease B. Geve all entries necessury to recoed these transuctions. Assume any necessary delay rental puyments were made 5. Discuss why each party to a test-well contribedion situation woeld enter into the trancestice. 316 Cusswork03-Mod III Ch3 6. Aggic Oil Compamy purchased scismic equipment en Match 1, 2007, conting 5100,000 . The seismic equipment was used in G.6G operations for the remainder of the calendar year, 2007 . Conpute straight-line depreciation for 2007, assaming a 10-ycar life and no salvage valse, and propure the entries to record the purchase and depreciation of the equipment