Fundamentals of Oil & Gas Accounting 5th Edition by Rebecca Gallun, Charlotte Wright

تمرين 23

On December 31, 2015, Launch Oil Company's unproved property account for leases
that are not individually significant had a balance of $800,000. The impairment
allowance account had a balance of $75,000. Give the entries for each of the following
transactions occurring in 2015, 2016, and 2017. (All transactions concern individually
insignificant unproved leases.)
a. Assuming Launch has a policy of maintaining a 55% allowance, i.e., 55% of gross
unproved properties, give the entry to record impairment on December 31, 2015.
b. During 2016, Launch surrendered leases that cost $300,000.
c. During 2016, leases that cost $50,000 were proved.
d. During 2016, leases costing $310,000 were acquired.
e. Give the entry to record impairment on December 31, 2006.
f. During 2017, leases costing $428,000 were surrendered.