Assume the following data for the following wells commingled production tanks on the Wilmington Ranch located inLaVaca County, Texas. Measured production is 2,228 barrels from Lease C and 2,280 barrels from Lease D. Aftertreatment at the central tank battery, 4,500 barrels are sold.Lease C WellsWell 124-Hr Test (bbl)30Days Produced28Well 24030Lease D Wells24-Hr Test (bbl)Days ProducedWell 12030Well 23530Well 35026Current Spot Oil PriceSeverance Tax Rate$46.00/bbl5%Working InterestRoyalty interest100%1/8thPrepare entries recognizing revenue at time of sale if the OPERATOR assumes the responsibility of distributingseverance taxes and royalty.English (United States)

To prepare the journal entries, recognize the revenue from the sale of oil, taking into account the…

Answered: Assume the following data for the…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 22E: The activity of moving materials uses four forklifts, each leased for 18,000 per year. A forklift is...

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Well Liberty Well 1 24-Hr Test (bbl) Days Produced 20 30 Freedom Well A-1 35 26 Dyson Powell 50 24 Total Production Sold 2,900 measured at point of delivery Assume the data above for the following wells commingled production in Tank Battery on the Premise Lease located in Fayette County, Texas. Cameron Oil Company (70% WI) and Garcia Company (30% WI) own a joint working interest in the Dowling Field. The expected selling price was $60/bbl. The royalty interest is 1/5 and the severance tax rate is 10%. What amount of gross revenue, royalty, severance taxes, and net revenue should Cameron Oil Company record for each well (Liberty Well 1, Freedom Well A-1, and Dyson Powell)? Focus
Assume the data above for the following wells commingled production in Tank Battery on the Premise Lease located in Fayette County, Texas. Cameron Oil Company (70% WI) and 60 1 Garcia Company (30% WI) own a joint working interest in the Dowling Field. The expected selling price was $bl. The rovalty interest is and the severance tax rate is 10%. b Prepare the revenue entries for Cameron Oil Company and Garcia Company. Well Days Produced 30 26 24 Liberty Well 1 Freedom Well A-1 Total Production Sold 2,900-measured at point of delivery 24-Hr Test (bbl) 20 35 Dyson Powell 50 Assume the data above for the following wells commingled production in Tank Battery on the Premise Lease located in Fayette County, Texas. Cameron Oil Company (70% WI) and Garcia Company (30% WI) own a joint working interest in the Dowling Field. The expected selling price was $60/bbl. The royalty interest is 1/5 and the severance tax rate is 10%. Prepare the revenue entries for Cameron Oil Company and Garcia Company.
Well 24-Hr Test (bbl) Days Produced Total Production Sold Liberty Well 1 2,900 – measured at point of delivery 20 30 Freedom Well A-1 35 26 Dyson Powell 50 24 Assume the data above for the following wells commingled production in Tank Battery on the Premise Lease located in Fayette County, Texas. Cameron Oil Company (70% WI) and Garcia Company (30% WI) own a joint working interest in the Dowling Field. The expected selling price was $60/bbl. The royalty interest is 1/5 and the severance tax rate is 10%. Cameron Oil Company assumes the responsibility of distributing severance taxes and royalty. Prepare the revenue entries for Cameron Oil Company and Garcia Company. What amount of gross revenue, royalty, severance taxes and net revenue should Cameron Oil Company record for each well (Liberty Well 1, Freedom Well A-1 and Dyson Powell)?
Manashukh
The activity of moving materials uses four forklifts, each leased for 18,000 per year. A forklift is capable of making 5,000 moves per year, where a move is defined as a round trip from the plant to the warehouse and back. During the year, a total of 18,000 moves were made. What is the cost of the unused capacity for the moving goods activity? a. 5,400 b. 1,800 c. 7,200 d. 3,600
Baghiben
1.During the month of August, a mining company has a gross income of P4,200,000 from the production of nickel. All expenses, excluding depletion expenses for this month, amount to P2,800,000. If the fixed depletion rate for nickel is 22%, what is the depletion allowance for this month? 2.To develop on oil well containing 5,000,000 barrels of oil required an initial investment of P40,000,000. In a certain year, 500,000 barrels of oil were produced from this well. Determine the depletion charge during the year. 3. a certain machine costs p40,000 and has a life of 4 years and salvage value of p5000. the production output of this machine in units per year for the first year; 1,800 units,2nd year 2,200 units; 3rd year; 3,000 units, 4th year 4,000 units. the units produced are of uniform quality. what is the annual depreciation charge?
St. Johns Medical Center (SJMC) has five medical technicians who are responsible for conducting cardiac catheterization testing in SJMCs Cath Lab. Each technician is paid a salary of 36,000 and is capable of conducting 1,000 procedures per year. The cardiac catheterization equipment is one year old and was purchased for 250,000. It is expected to last five years. The equipments capacity is 25,000 procedures over its life. Depreciation is computed on a straight-line basis, with no salvage value expected. The reading of the catheterization results is conducted by an outside physician whose fee is 120 per test. The technicians report with the outside physicians note of results is sent to the referring physician. In addition to the salaries and equipment, SJMC spends 50,000 for supplies and other costs needed to operate the equipment (assuming 5,000 procedures are conducted). When SJMC purchased the equipment, it fully expected to perform 5,000 procedures per year. In fact, during its first year of operation, 5,000 procedures were run. However, a larger hospital has established a clinic in the city and will siphon off some of SJMCs business. During the coming years, SJMC expects to run only 4,200 cath procedures yearly. SJMC has been charging 850 for the procedureenough to cover the direct costs of the procedure plus an assignment of general overhead (e.g., depreciation on the hospital building, lighting and heating, and janitorial services). At the beginning of the second year, an HMO from a neighboring community approached SJMC and offered to send its clients to SJMC for cardiac catheterization provided that the charge per procedure would be 550. The HMO estimates that it can provide about 500 patients per year. The HMO has indicated that the arrangement is temporaryfor one year only. The HMO expects to have its own testing capabilities within one year. Required: 1. Classify the resources associated with the cardiac catheterization activity into one of the following: (1) committed resources, or (2) flexible resources. 2. Calculate the activity rate for the cardiac catheterization activity. Break the activity rate into fixed and variable components. Now, classify each activity resource as relevant or irrelevant with respect to the following alternatives: (1) accept the HMO offer, or (2) reject the HMO offer. Explain your reasoning. 3. Assume that SJMC will accept the HMO offer if it reduces the hospitals operating costs. Should the HMO offer be accepted? 4. Jerold Bosserman, SJMCs hospital controller, argued against accepting the HMOs offer. Instead, he argued that the hospital should be increasing the charge per procedure rather than accepting business that doesnt even cover full costs. He also was concerned about local physician reaction if word got out that the HMO was receiving procedures for 550. Discuss the merits of Jerolds position. Include in your discussion an assessment of the price increase that would be needed if the objective is to maintain total revenues from cardiac catheterizations experienced in the first year of operation. 5. Chandra Denton, SJMCs administrator, has been informed that one of the Cath Lab technicians is leaving for an opportunity at a larger hospital. She met with the other technicians, and they agreed to increase their hours to pick up the slack so that SJMC wont need to hire another technician. By working a couple hours extra every week, each remaining technician can perform 1,050 procedures per year. They agreed to do this for an increase in salary of 2,000 per year. How does this outcome affect the analysis of the HMO offer? 6. Assuming that SJMC wants to bring in the same revenues earned in the cardiac catheterization activitys first year less the reduction in resource spending attributable to using only four technicians, how much must SJMC charge for a procedure?
Consider the construction of 9-week foundation activity with the operation cost broken down into the following elements: - Labor 1600 $ paid 400 $ weekly. - Equipments 3500 $ paid 500 $ weekly after 5 weeks - Materials 1200 $ paid 200 $ weekly after 5 weeks - Subcontractors 1500 $ paid 300 $ weekly after 3 weeks Determine the expenses (cash out) of this activity. Assume any missing data
Andronicus Corporation (AC) has the following jumbled information about an investment proposal: a. Revenues in each of years 1-4 = $21,000 b. Year O initial investment = $41,000 c. Inventory level = $10,500 in year 1, $11,100 in year 2, and $5,500 in year 3 d. Production costs = $7,300 in each of years 1-4 e. Salvage value = $12,100 in year 4 f. Depreciation = 100% immediate bonus depreciation g. Tax rate = 21% h. There is an additional 6-month lag for all cash flows after year O. For example, customers pay consistently with a 6-month lag, as AC does for production costs, taxes, etc. Draw up a set of cash flow forecasts as in Table 6.4. If the cost of capital is 10%, what is the project's NPV? Assume that, if the project generates losses, those losses can be used to offset profits for tax purposes elsewhere in the business. Note: Do not round your intermediate calculations. Round your final answer to the nearest whole dollar amount. NPV Answer is complete but not entirely correct. $…
Zippy Inc. manufactures a fuel additive, Surge, which has a stable selling price of 44 per drum. The company has been producing and selling 80,000 drums per month. In connection with your examination of Zippys financial statements for the year ended September 30, management has asked you to review some computations made by Zippys cost accountant. Your working papers disclose the following about the companys operations: Standard costs per drum of product manufactured: Materials: Costs and expenses during September: Chemicals: 645,000 gallons purchased at a cost of 1,140,000; 600,000 gallons used. Empty drums: 94,000 purchased at a cost of 94,000; 80,000 drums used. Direct labor: 81,000 hours worked at a cost of 816,480. Factory overhead: 768,000. Required: Calculate the following for September, using the formulas on pages 421422 and 424 (Round unit costs to the nearest whole cent and compute the materials variances for both Surge and for the drums.): 1. Materials quantity variance. 2. Materials purchase price variance. 3. Labor efficiency variance. 4. Labor rate variance.
An oil company using the successful-efforts method drilled two wells. The first, a dry hole, costP50,000. The second cost P100,000 and had estimated recoverable reserves of 25,000 barrels, ofwhich 10,000 were sold this year. What will be the total expense for the year related to theexploration and production from these two wells? a. P40,000 b. P60,000 c. P 90,000 d. P150,000

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