Chat with AI
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 3
Company Z owns a 100% WI in a proved property with net capitalized costs of
$100,000. Company Z sold the lease for $250,000 cash and a production payment of
$150,000, plus interest of 10% to be paid out of the proceeds from the first 60% of
the oil produced. Satisfaction of the retained production payment is not reasonably
assured. The fair market value of the production payment interest is estimated to be
$50,000. Give the entry to record the conveyance assuming that Company Z uses the
successful efforts method.
$100,000. Company Z sold the lease for $250,000 cash and a production payment of
$150,000, plus interest of 10% to be paid out of the proceeds from the first 60% of
the oil produced. Satisfaction of the retained production payment is not reasonably
assured. The fair market value of the production payment interest is estimated to be
$50,000. Give the entry to record the conveyance assuming that Company Z uses the
successful efforts method.
Explanation
Verified
Verified
Successful efforts method
The corporati...
Fundamentals of Oil & Gas Accounting 5th Edition by Rebecca Gallun, Charlotte Wright
Why don’t you like this exercise?
Other Minimum 8 character and maximum 255 character
Character 255
