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Fundamentals of Oil & Gas Accounting 5th Edition by Rebecca Gallun, Charlotte Wright
Edition 5ISBN: 9781630181031Fundamentals of Oil & Gas Accounting 5th Edition by Rebecca Gallun, Charlotte Wright
Edition 5ISBN: 9781630181031 Exercise 13
Blow Out Oil Company owns a 100% WI in Lease A. Lease A is burdened with a 1/6
royalty. During the month of June, a total of 12,000 barrels of oil was produced and
sold. Assume the selling price of the oil was $72/bbl and the production tax was 5%.
REqUIRED: Give the entry required to record the sale of the oil for each of the
following:
a. The purchaser assumes responsibility for distributing taxes and royalty income.
b. Blow Out Oil Company assumes the responsibility.
royalty. During the month of June, a total of 12,000 barrels of oil was produced and
sold. Assume the selling price of the oil was $72/bbl and the production tax was 5%.
REqUIRED: Give the entry required to record the sale of the oil for each of the
following:
a. The purchaser assumes responsibility for distributing taxes and royalty income.
b. Blow Out Oil Company assumes the responsibility.
Explanation
Verified
Verified
a.The purchaser assu...
Fundamentals of Oil & Gas Accounting 5th Edition by Rebecca Gallun, Charlotte Wright
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