EcoPower Holdings owned the following unproved property as of the end of 1976.

Significant Leases		Insignificant Leases
Lease G	$520,000	Lease H	$85,000
Lease I	$330,000	Lease J	$50,000
Total	$850,000	Lease K	$45,000
		Lease L	$40,000
		Total	$220,000

Although no activity took place on Lease G during the year, EcoPower decided that Lease G was not impaired because there were still three years left in that lease’s primary term. One dry hole was drilled on Lease I during the year; but because EcoPower intended to drill one more well on Lease I in the coming year, it decided that Lease I was only 50% impaired. With respect to the insignificant leases, past experience indicates that 70% of all unproved properties assessed on a group basis will eventually be abandoned. EcoPower’s policy is to provide at year-end an allowance equal to 65% of the gross cost of these properties. The allowance account had a balance of $25,000 at year end. Give the entries to record impairment, prepare the income statement and balance sheet, and calculate the deferred tax liability.