Question # 3 (37 marks) Answer the following questions related to Capital Company, a successful efforts method company, for the year 2020: a. Capital Company obtained shooting rights only for RO 4 per acre on 2500 acres owned by North Muscat. Prepare the necessary journal entry to capture the above transaction b. Capital Company obtained shooting rights coupled with an option to lease for RO 90,000 on 8000 acres owned by South Muscat. These 8000 acres are located adjacent to the 2500 acres owned by North Muscat. The cost was apportioned between the option and the shooting rights. The company decided to lease 2000 acres from South Muscat and paid RO 40,000. Prepare the necessary journal entry(s) to capture the above transaction. c. Capital Company had the following individually significant leases: Lease Acquisition Cost RO 4,000,000 B Impairment Allowance RO 50,000 (debit balance) RO 3,500,000 (credit balance) C RO 7,500,000 The company has a policy to impair 40% of the gross acquisition cost during the year. On December 15, 2020, Capital decided to surrender Lease B. The company discovered reserves on Lease C on December 23, 2020. Prepare the necessary journal entry to capture the above transaction. d. Capital Company decided to lease the following properties: Lease Explored Acres Bonus per Legal costs Landmen acres leased acre & Recording salaries fees D 640 640 RO 100 RO 600 RO 100 RO 1000 RO 33,600 RO 33,600 E 2,000 1,280 Record the acquisition costs of the above leases based on acreage leased. Question 13 (37 marks) Answer the following questions related to Capital Company, a successful efforts method company, for the year 2020: a Capital Company obtained shooting rights only for RO 4 per acre on 2500 acres owned by North Muscat. Prepare the necessary journal entry to capture the above transaction. b. Capital Company obtained shooting rights coupled with an option to lease for RO 90,000 on 8000 acres owned by South Muscat. These 8000 acres are located adjacent to the 2500 acres owned by North Muscat. The cost was apportioned between the option and the shooting rights. The company decided to lease 2000 acres from South Muscat and paid RO 40,000. Prepare the necessary journal entry(s) to capture the above transaction. c. Capital Company had the following individually significant leases: Lease Acquisition Cost RO 4,000,000 B Impairment Allowance RO 50,000 (debit balance) RO 3,500,000 (credit balance) RO 7,500,000 The company has a policy to impair 40% of the gross acquisition cost during the year. On December 15, 2020, Capital decided to surrender Lease B. The company discovered reserves on Lease Con December 23, 2020. Prepare the necessary journal entry to capture the above transaction. d Capital Company decided to lease the following properties: Lease Explored Acres Bonus per Legal costs Landmen leased & Recording salaries fees | RO 100 | RO 600 RO 33,600 2.000 1,280 | RO 100 RO 1000 RO 33,600 acres acre D 640 640 E Record the acquisition costs of the above leases based on acreage leased. End of Test Paper Question # 3 (37 marks) Answer the following questions related to Capital Company, a successful efforts method company, for the year 2020: a. Capital Company obtained shooting rights only for RO 4 per acre on 2500 acres owned by North Muscat. Prepare the necessary journal entry to capture the above transaction b. Capital Company obtained shooting rights coupled with an option to lease for RO 90,000 on 8000 acres owned by South Muscat. These 8000 acres are located adjacent to the 2500 acres owned by North Muscat. The cost was apportioned between the option and the shooting rights. The company decided to lease 2000 acres from South Muscat and paid RO 40,000. Prepare the necessary journal entry(s) to capture the above transaction. c. Capital Company had the following individually significant leases: Lease Acquisition Cost RO 4,000,000 B Impairment Allowance RO 50,000 (debit balance) RO 3,500,000 (credit balance) C RO 7,500,000 The company has a policy to impair 40% of the gross acquisition cost during the year. On December 15, 2020, Capital decided to surrender Lease B. The company discovered reserves on Lease C on December 23, 2020. Prepare the necessary journal entry to capture the above transaction. d. Capital Company decided to lease the following properties: Lease Explored Acres Bonus per Legal costs Landmen acres leased acre & Recording salaries fees D 640 640 RO 100 RO 600 RO 100 RO 1000 RO 33,600 RO 33,600 E 2,000 1,280 Record the acquisition costs of the above leases based on acreage leased. Question 13 (37 marks) Answer the following questions related to Capital Company, a successful efforts method company, for the year 2020: a Capital Company obtained shooting rights only for RO 4 per acre on 2500 acres owned by North Muscat. Prepare the necessary journal entry to capture the above transaction. b. Capital Company obtained shooting rights coupled with an option to lease for RO 90,000 on 8000 acres owned by South Muscat. These 8000 acres are located adjacent to the 2500 acres owned by North Muscat. The cost was apportioned between the option and the shooting rights. The company decided to lease 2000 acres from South Muscat and paid RO 40,000. Prepare the necessary journal entry(s) to capture the above transaction. c. Capital Company had the following individually significant leases: Lease Acquisition Cost RO 4,000,000 B Impairment Allowance RO 50,000 (debit balance) RO 3,500,000 (credit balance) RO 7,500,000 The company has a policy to impair 40% of the gross acquisition cost during the year. On December 15, 2020, Capital decided to surrender Lease B. The company discovered reserves on Lease Con December 23, 2020. Prepare the necessary journal entry to capture the above transaction. d Capital Company decided to lease the following properties: Lease Explored Acres Bonus per Legal costs Landmen leased & Recording salaries fees | RO 100 | RO 600 RO 33,600 2.000 1,280 | RO 100 RO 1000 RO 33,600 acres acre D 640 640 E Record the acquisition costs of the above leases based on acreage leased. End of Test Paper