On December 31, 2020, the account for Mikael Energy Company's individually insignificant unproved properties had a balance
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Question:
On December 31, 2020, the account for Mikael Energy Company's individually insignificant unproved properties had a balance of $700,000. The allowance account had a balance of $90,000.
Required:
Give the entries for each of the following transactions occurring in 2020 and 2021 (all transactions concerned individually insignificant unproved leases).
a. Assuming Mikael has a policy of maintaining a 40% allowance, i.e. 40% of gross unproved properties, give the entry to record impairment on December 31, 2020.
b. During 2021, Mikael surrendered leases that cost $130,000.
c. During 2021, leases that cost $60,000 were proved.
d. Give the entry to record impairment on December 31, 2021.
Related Book For
Accounting Principles
ISBN: 978-1119411482
13th edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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