Seoli owned a 20% royalty interest in an oil well. Seoli received royalty payments on January 31 for the oil sold between the previous June 1 and November 30, an on July 31 for oil between December 31 and May 31. Production revealed the foll
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Seoli owned a 20% royalty interest in an oil well. Seoli received royalty payments on January
31 for the oil sold between the previous June 1 and November 30, an on July 31 for oil between
December 31 and May 31. Production revealed the following sales:
June 1, 2019 - November 30, 2019 3,000,000
December 1, 2019 - December 31, 2019 500,000
December 1, 2019 - May 31, 2020 4,000,000
June 1, 2020 - November 30, 2020 3,250,000
December 1, 2020 - December 31, 2020 700,000
What amount should be reported as royalty revenue for 2020?
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- 6. Suga owned a 20% royalty interest in an oil well. Suga received royalty payments on January 31 for the oil sold between the previous June 1 and November 30, an on July 31 for oil between December 31 and May 31. Production revealed the following sales: June 1, 2019 - November 30, 2019 December 1, 2019 - December 31, 2019 December 1, 2019 - May 31, 2020 June 1, 2020 - November 30, 2020 December 1, 2020 - December 31, 2020 What amount should be reported as royalty revenue for 2020? 3,000,000 500,000 4,000,000 3,250,000 700,000Mattson Company receives royalties on a patent It developed several years ago. Royalties are 4% of net sales, to be received on September 30 for sales from January through June and receivable on March 31 for sales from July through December. The patent rights were distributed on July 1, 2023, and Mattson accrued royalty revenue of $57,000 on December 31, 2023, as follows: General Journal Receivable-royalty revenue Royalty revenue 57,000 Mattson received royalties of $61,700 on March 31, 2024, and $77,000 on September 30, 2024. In December, 2024, the patent user Indicated to Mattson that sales subject to royalties for the second half of 2024 should be $770,000. View transaction list Required: 1. Prepare any Journal entries Mattson should record during 2024 related to the royalty revenue. Note: If no entry is required for a transaction/event, select "No Journal entry required" in the first account field. Journal entry worksheet < Debit 57,000 1 2 3 Credit Record the entry related to the…Jaimson Energy operates a lease in Hutchinson County, Texas. The lease is burdened with a 1/8 royalty interest held by the Burnett Family Trust. Prior to the first sale of oil Jaimson Energy assigns an overriding royalty interest of 6.25% of its 87.5% net revenue interest to Sunset Oil. Following the assignment, Jaimson Energy produces 1,500 barrels of oil in March 2022 and sells 975 barrels. The severance tax is 5%, lease operating expenses totaled $35,000 and price per BBL is $99. Record the sale for the Burnett Family Trust. How much of the lease operating expenses does Sunset Oil pay?
- WWD Oil Company sells 10,000 bbl of oil for $70 per barrel. The lease provides for a 1/6 Royalty interest, and the Working interest owner has distributed an Overriding Royalty interest of 25%. The severance tax rate is 6%. Record the entries of RI owner, the ORI owner and the WI owner, assuming WWD Oil assumes responsibility for distributing the taxes and royalty income.Louisiana Oil Company (LOC) paid $3,000,000 for an oil reserve estimated to hold 50,000 barrels of oil. Oil production is expected to be 10,000 barrels in year 1, 30,000 barrels in year 2, and 10,000 barrels in year 3. LOC expects to begin selling barrels from its oil inventory in year 2. Required: Assuming these estimates are accurate, determine the book value of oil reserves at the end of year 1.Johnson Company receives royalties on a patent it developed several years ago. Royalties are 5% of net sales, to be received on September 30 for sales from January through June and receivable on March 31 for sales from July through December. The patent rights were distributed on July 1, 2020, and Johnson accrued royalty revenue of $50,000 on December 31, 2020, as follows: Receivable-royalty revenue Royalty revenue 50,000 Required: 50,000 Johnson received royalties of $65,000 on March 31, 2021, and $90,000 on September 30, 2021. December, 2021, the patent user indicated to Johnson that sales subject to royalties for the second half of 2021 should be $600,000. Prepare any journal entries Johnson should record during 2021 related to the royalty revenue.
- A Ltd buys a machine on 1 June 19.1 the cost price of which is R1 000 000. A Ltd provides for depreciation on machinery at 20% per annum according to the straight-line method. The SA Revenue Service allows a wear-and-tear allowance of 25% per annum according to the straight-line method. The year-end of A Ltd is 31 May. Assume a taxation rate of 40%. Assume that A Ltd maintains a profit before provision for depreciation of R500 000 each year. Identify the amount for accounting profit before tax, after depreciation provision for the year ended 31 May 19.2.A Ltd buys a machine on 1 June 19.1 the cost price of which is R1 000 000. A Ltd provides for depreciation on machinery at 20% per annum according to the straight-line method. The SA Revenue Service allows a wear-and-tear allowance of 25% per annum according to the straight-line method. The year-end of A Ltd is 31 May. Assume a taxation rate of 40%. Assume that A Ltd maintains a profit before provision for depreciation of R500 000 each year. Identify the current tax for the year ended 31 May 19.2. Select one: a. R180 000 b. R20 000 c. R100 000 d. R120 000Abhijit Co. leased equipment from Barua Corp. on July 1, 2018, for an 8-year period expiring June 30, 2026. Equal annual payments on July 1 of each year are $120,000. The first payment was made on July 1, 2018. The rate of interest contemplated by Abhijit and Barua is 10%. The cash selling price of the equipment is $704,000, and the cost of the equipment on Barua’s accounting records is $560,000. The lease is appropriately recorded as a sales-type lease. What is the amount of selling profit on the sale and interest revenue that Barua will record for the year ended December 31, 2018?
- On January 10, 2021, Halo-Halo Enterprises had an equipment with a carrying amount of P2,000,000. On the same day, the entity classified the equipment as held for sale with an estimated selling price of P1,900,000 and disposal cost of P100,000. The remaining life of the equipment is for 5 years. On December 31, 2021, the estimated selling price of the equipment had increased to P2,200,000 with estimated selling costs of P50,000. What amount should be reported as gain on reversal of impairment in 2021?During 2020, Prospect Company incurred P4,000,000 in exploration cost for each of the 15 oil wells drilled in 2020. Of the 15 wells drilled, 10 were dry holes. The entity used the successful effort method of accounting. The entity depleted 30% of the oil discovered in 2020. What amount of exploration cost should be reported in the December 31, 2020 statement of financial position? a.42,000,000b.14,000,000c.20,000,000d.6,000,000Ltd buys a machine on 1 June 19.1 the cost price of which is R1 000 000. A Ltd provides for depreciation on machinery at 20% per annum according to the straight-line method. The SA Revenue Service allows a wear-and-tear allowance of 25% per annum according to the straight-line method. The year-end of A Ltd is 31 May. Assume a taxation rate of 40%. Assume that A Ltd maintains a profit before provision for depreciation of R500 000 each year. Identify the depreciation amount that would be deducted to arrive at the profit for year for accounting purposes at 31 May 19.2. Select one: a. R20 000 b. R200 000 c. R50 000 d. R250 000