Question

Score: 0 of 5 pts 3 of 4 (0 complete) HW Score: 0%, 0 of 40 pts CCOL P9-33A (book/static) Question Help Conseco Oil, Inc, has an account titled Oil and Gas Proportios. Conseco paid $6,600,000 for oil reserves holding an estimated 1,000,000 barrels of oil. Assume the company paid $570,000 for additional geological tests of the property and $450,000 to prepare for drilling. During the first year, Conseco removed and sold 72,000 barrels of oil. Record all of Conseco's transactions, including depletion for the first year. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) nts vork Conseco paid $6,600,000 for oil reserves holding an estimated 1,000,000 barrels of oil. Record the payment for the oil reserves. Do not record payment for any additional costs associated with the oil reserves (geological testing and/or driling). We will do this in the following entry. iz/Test Date Accounts and Explanation Debit Credit Choose from any list or enter any number in the input fields and then click Check Answer. parts Clear All Check

Answer 1

Record the journal entries :-

Date	Account title and explanation	Debit ($)	Credit ($)
	Oil and gas properties	6,600,000
	To cash		6,600,000
	(To record the purchase of oil reserve)
	Oil and gas properties	1,020,000
	To cash ($570,000+$450,000)		1,020,000
	(To record the additional costs incurred for all reserve )
	Depletion expenses - oil and gas properties	548,640
	To Accumulated depletion - oil and gas properties		548,640
	(To record the depletion expenses )
	[($6,600,000+$1,020,000)/1,000,000]*72000