Question
Ocean Oil Company owned the following unproved property at 12/31/85: Significant Leases Cost Impairment Insignificant Leases Cost Total Impairment Lease A $350,000 $140,000 Lease C
Ocean Oil Company owned the following unproved property at 12/31/85:
Significant Leases | Cost | Impairment | Insignificant Leases | Cost | Total Impairment |
Lease A | $350,000 | $140,000 | Lease C | $25,000 | |
Lease B | $460,000 | $130,000 | Lease D | $30,000 | |
Lease E | $20,000 | ||||
Lease F | $15,000 | ||||
$90,000 | $38,000 |
Prepare journal entries for 2086, assuming the following events:
a. Proved reserves were found on Lease A and Lease B.
b. Lease D was impaired by an additional $5,000.
c. Lease E was sold for $22,000.
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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
