A saltwater disposal system is added to Lease As gathering system at a cost of $225,000. Assume
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A saltwater disposal system is added to Lease A’s gathering system at a cost of $225,000. Assume the following acquisition costs and monthly operating expenses for the month of May 2018 is $30,000.
Case A: The disposal system serves several wells on two different leases. There are 7 wells on Lease A and 10 wells on Lease B.
Case B: The disposal system serves only the wells on Lease A.
REQUIRED: Record the acquisition cost and the monthly expenses.
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