Several wells were being drilled on leases in close proximity to an undeveloped lease owned by...
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Several wells were being drilled on leases in close proximity to an undeveloped lease owned by Tyler oil and Gas Company. In order to obtain G&G information from the wells, Tyler Company entered into the following agreements with the other companies that own the working interests on the various leases: Well 1: Dry-hole contribution of $30,000 Well 2: Dry-hole contribution of $50,000 Well 3: Bottom-hole contribution of $20,000 to be paid if and when the well reaches a minimum depth of 5000 feet. Well 4: Bottom- hole contribution of $40,000 to be paid if and when the well reaches a minimum depth of 8,000 feet. The following results were obtained: Well 1------- Dry Well 2------- Completed as a producer Well 3------- Drilled to agreed depth and determined to be dry. Well 4------- Abandoned after drilling to 4,500 feet. Give entries. Several wells were being drilled on leases in close proximity to an undeveloped lease owned by Tyler oil and Gas Company. In order to obtain G&G information from the wells, Tyler Company entered into the following agreements with the other companies that own the working interests on the various leases: Well 1: Dry-hole contribution of $30,000 Well 2: Dry-hole contribution of $50,000 Well 3: Bottom-hole contribution of $20,000 to be paid if and when the well reaches a minimum depth of 5000 feet. Well 4: Bottom- hole contribution of $40,000 to be paid if and when the well reaches a minimum depth of 8,000 feet. The following results were obtained: Well 1------- Dry Well 2------- Completed as a producer Well 3------- Drilled to agreed depth and determined to be dry. Well 4------- Abandoned after drilling to 4,500 feet. Give entries.
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Based on the given information here are the journal entries for the agreements and the results obtai... View the full answer
Related Book For
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon
Posted Date:
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