Seldin company owns a royalty interest in an oil well the, Ask an Expert

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Seldin Company owns a royalty interest in an oil well. The contract stipulates that Seldin will receive royalty paymentssemiannually. On Jan 31 and July 31. The Jan 31 payment will be for20% of the oil sold to jobbers between the previous June 1 &Nov 30, and the Jul 31 payment will be for oil sold between theprevious Dec 1 and May 31. Royalty receipts for 2008 amounted to$80,000 to $100,000 on Jan 31 and Jul 31 respectively.

On Dec 31 2007, accrued royalty revenue receivable amounted to$15,000. Production reports show the following oil sales:

June 1 - Nov 30, 2007 $400,000

Dec 1 - May 31, 2008 $500,000

June 1 - Nov 30, 2008 $425,000

Dec 1 - Dec 31, 2008 $70,000

What amount should Seldin report as royalty revenue for2008?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9796685

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