PetroNova Corp. owned the following unproved property as of the end of 2008.

Significant Leases		Insignificant Leases
Lease V	$420,000	Lease W	$70,000
Lease X	$350,000	Lease Y	$50,000
Total	$770,000	Lease Z	$40,000
		Lease A	$30,000
		Total	$190,000

Although no activity took place on Lease V during the year, PetroNova decided that Lease V was not impaired because there were still four years left in that lease’s primary term. Two dry holes were drilled on Lease X during the year; but because PetroNova intended to drill one more well on Lease X in the coming year, it decided that Lease X was only 40% impaired. With respect to the insignificant leases, past experience indicates that 72% of all unproved properties assessed on a group basis will eventually be abandoned. PetroNova’s policy is to provide at year-end an allowance equal to 68% of the gross cost of these properties. The allowance account had a balance of $20,000 at year end. Give the entries to record impairment, prepare the statement of retained earnings, and calculate the current tax expense.