Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Falcon Gas Inc. and Ike Gas Co. jointly own the Javelina Field. Falcon Gas Inc. owns 60% of the working interest and is the operating
Falcon Gas Inc. and Ike Gas Co. jointly own the Javelina Field. Falcon Gas Inc. owns 60% of the working interest and is the operating company. Ike Gas Co. owns 40% of the working interest. There is also a 1/8 royalty interest on the field. During this month, 120,000 Mcf was delivered to the purchasers of Falcon Gas Inc. and 75,000 Mcf was delivered to the purchasers of Ike Gas Co. The price of gas is $5.00/Mcf. Under the sales method, Falcon Gas Inc. should recognize in this month gas revenues of: A. $0. B. $525,000. C. $585,000. D. $600,000.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started