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

تمرين 6

Stephens Oil Company produces a total of 2,000 barrels of oil in June that is sold in
July. The posted field price and the actual selling price is $66/bbl. The severance tax rate
is 5%. The purchaser of the oil will pay the severance tax to the state and also will pay
the royalty interest owner. The royalty interest is 1/8.
REqUIRED: Prepare entries assuming Stephens Oil recognizes revenue