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Natural Resource and Intangible Accounting McLeansboro Oil Company acquired a small oil company...

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Accounting

Natural Resource and Intangible Accounting
McLeansboro Oil Company acquired a small oil company with only three assets during a recent year. The assets were acquired for $1,350,000 cash.
Asset Fair Value Expected Life
Oil $1,125,00055,000 barrels
Land 78,000 Indefinite
Equipment 62,000550,000 barrels
Required:
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1. Prepare the entry to record this acquisition in McLeansboro's journal. (Hint: Record the cost in excess of fair value as goodwill.) If an amount box does not require an entry, leave it blank.
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2. If McLeansboro pumps and sells 11,000 barrels of oil in 1 year, compute the amount of depletion. Do not round intermediate calculations.
$fill in the blank 92e4f5014ff7fbf_1
537.77
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3. Prepare journal entries to record depletion for the 11,000 barrels of oil pumped and sold. First record depletion and then record the sale of the oil. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations.
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4. Conceptual Connection: Is the goodwill amortized?
Yes

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