Question
Mercury Oil Company owned the following unproved property at 12/31/97: Significant Leases Cost Impairment Insignificant Leases Cost Total Impairment Lease A $370,000 $160,000 Lease C
Mercury Oil Company owned the following unproved property at 12/31/97:
Significant Leases | Cost | Impairment | Insignificant Leases | Cost | Total Impairment |
Lease A | $370,000 | $160,000 | Lease C | $50,000 | |
Lease B | $540,000 | $180,000 | Lease D | $40,000 | |
Lease E | $35,000 | ||||
Lease F | $25,000 | ||||
$150,000 | $55,000 |
Requirement:
Prepare journal entries for 2098, assuming the following events:
a. Lease A was sold for $380,000.
b. Lease B was impaired by an additional $15,000.
c. Proved reserves were found on Lease C and Lease D.
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Accounting Theory Conceptual Issues in a Political and Economic Environment
Authors: Harry Wolk, James Dodd, John Rozycki
8th edition
1412991692, 978-1412991698
