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

تمرين 19

Gamma Oil Company sold or used the gas produced on Lease A during January as
follows:
a. 300 Mcf used as fuel to operate lease equipment
b. 800 Mcf sold to R Company at $12/Mcf
Assume a 1/7 RI and a production tax of 5%, and assume that the lease agreement has
a free fuel clause, but production taxes still have to be paid according to state law. The
selling price of gas is currently $12/Mcf.
REqUIRED: Give the entries necessary to record the gas sold or used, assuming the
operator distributes taxes and royalty.