Question
Pluto Petroleum owned the following unproved property at 12/31/34: Significant Leases Cost Impairment Insignificant Leases Cost Total Impairment Lease A $420,000 $200,000 Lease C $75,000
Pluto Petroleum owned the following unproved property at 12/31/34:
Significant Leases | Cost | Impairment | Insignificant Leases | Cost | Total Impairment |
Lease A | $420,000 | $200,000 | Lease C | $75,000 | |
Lease B | $620,000 | $220,000 | Lease D | $60,000 | |
Lease E | $55,000 | ||||
Lease F | $45,000 | ||||
$235,000 | $75,000 |
Requirement:
Prepare journal entries for 2035, assuming the following events:
a. Proved reserves were found on Lease A and Lease B.
b. Lease D was sold for $65,000.
c. Lease F was impaired by an additional $5,000.
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10 ACT Practice Tests
Authors: Steven Dulan
2nd Edition
978-0071591461, 007159146X
