FutureOil Ltd. owned the following unproved property as of the end of 2002.

Significant Leases		Insignificant Leases
Lease G	$530,000	Lease H	$85,000
Lease I	$310,000	Lease J	$45,000
Total	$840,000	Lease K	$40,000
		Lease L	$30,000
		Total	$200,000

Although no activity took place on Lease G during the year, FutureOil decided that Lease G was not impaired because there were still five years left in that lease’s primary term. Two dry holes were drilled on Lease I during the year; but because FutureOil 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. FutureOil’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 $28,000 at year end. Give the entries to record impairment, prepare the general ledger, and calculate the deferred tax liability.