JD Company owns a 100% WI in a proved property with net capitalized costs of $200,000....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
JD Company owns a 100% WI in a proved property with net capitalized costs of $200,000. JD Company sold the lease for $350,000 cash and a production payment of $160,000, plus interest of 8% to be paid out of the proceeds from the first 55% 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. REQUIRED: Give the entry to record the conveyance assuming that JD Company uses the successful efforts method. JD Company owns a 100% WI in a proved property with net capitalized costs of $200,000. JD Company sold the lease for $350,000 cash and a production payment of $160,000, plus interest of 8% to be paid out of the proceeds from the first 55% 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. REQUIRED: Give the entry to record the conveyance assuming that JD Company uses the successful efforts method.
Expert Answer:
Answer rating: 100% (QA)
Answer According to the given Conditions Civen Net capitalized Cests 209000 seld the lease 35000 Cas... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen
Posted Date:
Students also viewed these accounting questions
-
A capitalized lease should be amortized in accordance with the lessees normal depreciation policy. What time period should be used for lease amortization?
-
The High-Price Oil Company owns a pipeline network that is used to convey oil from its source to several storage locations. A portion of the network is as follows: Due to the varying pipe sizes, the...
-
In the text we discussed the market for oil assuming zero production costs, but now suppose that it is costly to get the oil out of the ground. Suppose that it costs $5 dollars per barrel to extract...
-
Chee, single, age 40, had the following income and expenses during 2017: Calculate Chees taxable income for the year before personal exemptions. If Chee has any options, choose the method that...
-
Ben Blum recently graduated from Moon shadow Universitys accounting program. He has been hired as an analyst by Primrose Tire Company and one of his first assigned tasks was to evaluate the North...
-
In Problems 4750, solve each equation on the interval 0 < 2. cos (20)+cos (40) = 0
-
Construct a frequency histogram for the data set using seven classes. Use the data set shown in the table at the left, which represents the actual liquid volumes (in ounces) in 25 twelve-ounce cans....
-
A construction company was sued for harassment when it failed to take seriously the complaints about offensive graffiti scrawled on rented portable toilets. The employer defended by saying (1)...
-
StorSmart Company makes plastic organizing bins. The company has the following inventory balances at the beginning and end of March: S Raw materials Work in process Finished goods Beginning Inventory...
-
Ruth Dennis, CEO of Prescott Industries, is concerned about the recent volatility in the company's operating income. She believes that since the number of units sold has been fairly stable over the...
-
Journalize, without explanations, the following transactions of Royal Fashion Distributors, a wholesaler that uses the perpetual inventory system, during the month of June 2020: June 3 Purchased...
-
Show how the Prisoners Dilemma led to massive doping in international track and field. What can authorities do to prevent doping from becoming a dominant strategy?
-
A destitute homeless man steals food from a convenience market. When prosecuted for theft, he pleads the defense of necessity. The prosecutor urges the trial judge to strike the defense on the ground...
-
An NFL running back comes to you, claiming that black running backs are the victims of racial discrimination by teams. Devise an econometric model that would test his claim. What finding would prove...
-
The International Olympic Committee now allows athletes to selfidentify as male or female. What do you think of this policy?
-
Give an economic interpretation of the deadweight loss that accompanies monopsony. What would eliminate this inefficiency?
-
A credit card company charges a customer 1.00% per month on the unpaid balance of charges on the credit card. What is the finance charge in a month when the customer has an unpaid balance of $141.74...
-
What can scientists learn by comparing the fossilized skeletons of extinct primates with the bones of modern species?
-
The company specializes in speculating on the direction of movements in the price of gold. On December 1 of Year 1, the company entered into a futures contract to sell 100 ounces of gold at $319 per...
-
How are attitudes regarding the financing of accounts receivable changing? Why do you think this is so?
-
(a) What is the LIFO conformity rule? (b) How has the rule changed since it was first adopted?
-
In a vapour compression refrigeration system, the condition of refrigerant before entering the compressor is (a) saturated liquid (b) wet vapour (c) dry saturated liquid (d) superheated vapour
-
During a refrigeration cycle, heat is rejected by the refrigerant in (a) compressor (b) condenser (c) evaporator (d) expansion valve
-
The highest temperature during the cycle in vapour compression refrigeration system occurs after (a) compression (b) condensation (c) expansion (d) evaporation
Study smarter with the SolutionInn App