Question
Mercury Energy owned the following unproved property at 12/31/38: Significant Leases Cost Impairment Insignificant Leases Cost Total Impairment Lease A $460,000 $240,000 Lease C $95,000
Mercury Energy owned the following unproved property at 12/31/38:
Significant Leases | Cost | Impairment | Insignificant Leases | Cost | Total Impairment |
Lease A | $460,000 | $240,000 | Lease C | $95,000 | |
Lease B | $700,000 | $260,000 | Lease D | $80,000 | |
Lease E | $75,000 | ||||
Lease F | $65,000 | ||||
$315,000 | $95,000 |
Prepare journal entries for 2039, assuming the following events:
a. Proved reserves were found on Lease A and Lease B.
b. Lease D was impaired by an additional $10,000.
c. Lease F was sold for $70,000.
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10 ACT Practice Tests
Authors: Steven Dulan
2nd Edition
978-0071591461, 007159146X
