EcoPetro Corporation owned the following unproved property as of the end of 2021.

Significant Leases		Insignificant Leases
Lease M	$600,000	Lease N	$80,000
Lease O	$350,000	Lease P	$50,000
Total	$950,000	Lease Q	$30,000
		Lease R	$25,000
		Total	$185,000

Although no activity took place on Lease M during the year, EcoPetro decided that Lease M was not impaired because there were still four years left in that lease’s primary term. Two dry holes were drilled on Lease O during the year; but because EcoPetro intended to drill one more well on Lease O in the coming year, it decided that Lease O was only 45% impaired. With respect to the insignificant leases, past experience indicates that 65% of all unproved properties assessed on a group basis will eventually be abandoned. EcoPetro’s policy is to provide at year-end an allowance equal to 75% of the gross cost of these properties. The allowance account had a balance of $28,000 at year end. Give the entries to record impairment, calculate depreciation, and prepare the statement of cash flows.