PrimePetro Ventures owned the following unproved property as of the end of 1978.

Significant Leases		Insignificant Leases
Lease P	$470,000	Lease Q	$75,000
Lease R	$350,000	Lease S	$50,000
Total	$820,000	Lease T	$45,000
		Lease U	$40,000
		Total	$210,000

Although no activity took place on Lease P during the year, PrimePetro decided that Lease P was not impaired because there were still four years left in that lease’s primary term. One dry hole was drilled on Lease R during the year; but because PrimePetro intended to drill one more well on Lease R in the coming year, it decided that Lease R was only 50% 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. PrimePetro’s policy is to provide at year-end an allowance equal to 70% of the gross cost of these properties. The allowance account had a balance of $27,000 at year end. Give the entries to record impairment, prepare the income statement and balance sheet, and calculate the current tax expense.