Bryant Oil Company produced a total of 1,000 barrels of oil in June 2022. The...
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Accounting
Bryant Oil Company produced a total of 1,000 barrels of oil in June 2022. The expected selling price was $120/bbl. The purchaser pays the severance taxes and the royalty interest owner and remits the remainder to Bryant Oil. The royalty interest is 1/5, and the severance tax rate is 10%.
Required:
a. Prepare the entry for Bryant Oil Company and the RI owner, assuming the oil was sold in June 2022 at the expected selling price.
b. Prepare the entries for Bryant Oil Company, assuming that revenue is recognized as produced based on the expected selling price and that the oil produced in June was sold in July 2022 for $125/bbl.
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