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Cheney Oil has an account thed Oil and Gas Properties. Cheney paid $6,800,000 for of reserves holding an esimated 300,000 barreis of of . Assume the compary paid 5540,000 for addsonal geological tests of the property and $490,000 to prepare for driling. During the first year, Cheney removnd and sold 95,000 barrels of oil. Record al af Cheney's transactions, including depletion for the first year. (Recoord debits first, then credits. Explanations will appear on the last line of the journal entry table) Cheney paid 56,800,000 for oil reserves holding an estimated 300,000 barreis of oil: Record the payment for the ol resorves. Do not record payment for any additional costs associated with the oll feserves (geologied testing andior ersing). We will do thit in the folowing entry. Assume the company paid $540,000 for additional geological tests of the preperty and $490,000 is prepare for drilling. Record the payment for additional geological tests of the property and for preparing the property for driling. (Record a single compound journal entry) During the first year, Cheney removed and scld 95,000 barreis of oll. Recoed the degletion expense for the first year. (Assume no residual value. Round interim calculations to the neorest cent and your final answers to the neareat whole doSar.)

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