On December 31, 2020, the account for Michael Oil Company's individually insignificant unproved properties had a balance of $650,000. The impairmenallowance account had a balance of $60,000.Required:Give the entries for each of the following transactions occurring in 2020 and 2021 (all transactions concern individually insignificant unproved leases)-a Assuming Michael has a policy of maintaining a 48% allowance, i.e. 48% of gross unproved properties, give the entry to record impairment onDecember 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.

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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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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