On December 31, 2020. the account for Michael Oil Company's individually insignificant unproved properties had a balance of S650,000. The impairm allowance account had a balance of $60,000. Required: Sive the entries for each of the following transactions occurring in 2020 and 2021 (all transactions concern individually insignificant unproved leasen a Assuming Michael has a policy of maintaining a 48% allowance, ie. 48% of gross unproved properties, give the entry to record impairment on December 31, 2020. b. During 2021, Michael surrendered leases that cost $220,000. c. During 2021, leases that cost $48,000 were proved. d. Give the entry to record impairment on December 31, 2021.
On December 31, 2020. the account for Michael Oil Company's individually insignificant unproved properties had a balance of S650,000. The impairm allowance account had a balance of $60,000. Required: Sive the entries for each of the following transactions occurring in 2020 and 2021 (all transactions concern individually insignificant unproved leasen a Assuming Michael has a policy of maintaining a 48% allowance, ie. 48% of gross unproved properties, give the entry to record impairment on December 31, 2020. b. During 2021, Michael surrendered leases that cost $220,000. c. During 2021, leases that cost $48,000 were proved. d. Give the entry to record impairment on December 31, 2021.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 6P
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