Gamma Oil Company sold or used the gas produced on Lease A during January as follows: a.
Question:
Gamma Oil Company sold or used the gas produced on Lease A during January as follows:
a. 300 Mcf used as fuel to operate lease equipment
b. 800 Mcf sold to R Company at $12/Mcf Assume a 1/7 RI and a production tax of 5%, and assume that the lease agreement has a free fuel clause, but production taxes still have to be paid according to state law. The selling price of gas is currently $12/Mcf.
REQUIRED: Give the entries necessary to record the gas sold or used, assuming the operator distributes taxes and royalty.
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Related Book For
Fundamentals Of Oil And Gas Accounting
ISBN: 9781593701376
5th Edition
Authors: Charlotte J. Wright, Rebecca A. Gallun
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