Chapter 7, Problem 75APSA

To determine

(a)

Introduction:

Journal entries in accounting means recording the transactions of a company in chronological order. It shows debit and credit balances. The totals of Debit side should always be equals to the totals of credit side.

To record:

The journal entry of McLeansboro oil company acquiring a small oil company.

To determine

(b)

Introduction:

The depletion of natural resources means the consumption of natural resources much faster than it can be renewed. These natural resources include mineral resources, ore deposits, gas deposits, oil deposits etc.

To find: The amount of oil depletion.

To determine

(c)

Introduction:

Journal entries in accounting means recording the transactions of a company in chronological order. It shows debit and credit balances. The totals of Debit side should always be equals to the totals of credit side.

To record:

The journal entry for depletion of.

To determine

(d)

Introduction:

Goodwill is an intangible asset that comes into picture when a buyer acquires an existing business. It is shown under the head of intangible asset under balance sheet. Intangible assetsarethose assets which can neither be seen nor be touched.

To state:

If the goodwill is amortized or not.

To determine

(e)

Introduction:

An item is said to be capitalized when it is recorded in the balance sheet as an asset rather than as an expense in the income and expenditure account.

To state:

The reason why land and building are capitalized separately from oil and well.