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AOS Company made an agreement with MAR to conduct G&G studies and diverse exploration activities on a lease owned by MAR. The agreement is in
AOS Company made an agreement with MAR to conduct G&G studies and diverse exploration activities on a lease owned by MAR. The agreement is in exchange for an interest in the property if proved reserves are discovered. If no proved reserves are found, AOS will be refunded for costs incurred.
1. AOS incurs AED 300,500 of G&G costs, AED 201,000 of other exploration costs and AED 220,000 for a track acquisition.
2. Alternative 1: Operations outcome was a dry hole.
3. Alternative 2: Found commercial quantities of Oil.
Required: Record below all journal entries for each of AOS and for MAR. For AOS
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