Question:
Conseco oil company has an account titled Oil and Gas Properties. Conseco paid $6,000,000 for oil reserves holding an estimated 500,000 barrels of oil. Assume the company paid $550,000 for additional geological tests of the property and $450,000 to prepare for drilling. During the first year, Conseco removed 70,000 barrels of oil, which it sold on account for $30 per barrel. Operating expenses totaled $800,000, all paid in cash.
Requirements:
1. Journalize the transactions
2. Income Statement for the project