Conseco Oil, Inc. has an account tited Oll and Gas Properties Conseco p tests of
ID: 2508971 • Letter: C
Question
Conseco Oil, Inc. has an account tited Oll and Gas Properties Conseco p tests of the property and $410,000 to prepare for dr debits first, then credits. Solect the explanation on the last line of the journal entry tablo.) paid $6,400,000 for oil reserves holding an estimated 400,000 barrels of oil. Assume the year, Conseco removed and sold 90,000 barrels of oil. Record all of Conseco's company paid $570,000 for additional geological transactions, including depletion for the fiest year (Record ling During the fiest Conseco paid S6400,000 for o reserves holding an estimated 400,000 baresof o payment for the oil reserves. Do not reoord payment for any aditional costs associated with the oll reserves (geological testing andlor diing) We willdo this in thetolowing entry Date Accounts and Explanation Debit Credit Assume the compary paid $570,000 for additional geological tosts of the property and $410,000 to prepare for drilling Record the payment for additional geological tosts of the property and for preparing the property for driling (Record a single question rom any list or enter any number in the input fields and then continue to the nextExplanation / Answer
Answer:
Event
Description
Debit $
Credit $
1
Oil and Gas properties
6,400,000
Cash
6,400,000
(To record the purchase of oil reserve)
2
Oil and Gas properties
980,000
Cash
980,000
(570,000+410,000)
(To record the cost associated with purchase
of oil reserve)
3
Depletion Expanses-Oil and gas reserve
1660500
Accumulated depletion -Oil and gas reserve
1660500
(64000,000+980,000)=7380,000
=7380,000*90,000/400,000=1660500
(to record the depletion)
Event
Description
Debit $
Credit $
1
Oil and Gas properties
6,400,000
Cash
6,400,000
(To record the purchase of oil reserve)
2
Oil and Gas properties
980,000
Cash
980,000
(570,000+410,000)
(To record the cost associated with purchase
of oil reserve)
3
Depletion Expanses-Oil and gas reserve
1660500
Accumulated depletion -Oil and gas reserve
1660500
(64000,000+980,000)=7380,000
=7380,000*90,000/400,000=1660500
(to record the depletion)