Explain the accounting equation and prepare a table showing the equation

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Explain the accounting equation and prepare a table showing the equation

Normally, only very large acquisitions are evaluated by examining the impact of the acquisition on the financial net income.

HTA Information

The tax model is used only if an after-tax analysis is done. Cash flows for the project are forecast for each year or each month until the well or project is no longer economical. Because of the ready availability of powerful computers, evaluations are usually done on a monthly basis, and the results are reported on an annual basis.

Explain the accounting equation and prepare a table showing the equation

Monthly calculations are more detailed but not necessarily more accurate. There is often a tendency to consider more detailed calculations as being more accurate.

The use of finer time increments does not necessarily lead to projections that are more in conformity with truth. Whether the calculations are done on a monthly or yearly basis, the same process is followed.

The profit for each period is defined as net cash flow and, for a Royalty-Tax system such as that used in the U. A sample calculation is shown in Table The values in this table were calculated monthly and then accumulated on an annual basis.

Gross production is one of the most important numbers entering the net cash flow calculation and, simultaneously, one of the most difficult to determine accurately.

Much of the science and art of petroleum engineering is involved in estimating these numbers for future time periods.

Shrinkage In the model defined in Fig. Usually the decline curves that are used to forecast future revenues are based on production rather than sales. If there is significant shrinkage, that should be taken into account before calculating the cash flows. Typical causes of shrinkage include lease use of gas for heater treaters or compressor fuel.

If shrinkage is negligible, gross sales will equal gross production. Typically, the people who drill and operate a well do not own the minerals they are extracting.

For example, the U. Government, state governments, Indian tribes, or private citizens usually own minerals in the United States. In most other countries, the state usually owns the minerals.

The producers lease the right to develop the minerals from the mineral owners. This leads to various kinds of interests in the property. Working Interest Working interest is a share of the costs. The total of all the working interests in a well must be equal to one.

Along with the share of the costs comes a reduced usually share of the revenue. Working interest may also change over time as a result of "oil field deals. As deals become more and more complex, it becomes very difficult to determine ownership. One method of answering the "who, what, when" question is discussed in Thompson and Wright [1].

Royalty Royalty is a share of the revenue free and clear of all costs of development and production. The royalty is paid to the owner of the mineral interest under the land associated with the well.

In the United States, the mineral interest can be "severed" from the surface ownership so that the person who owns the surface may not have any interest in the minerals and may not receive any income from a well.

MBS Information

In rare cases the owners of the working interest will own the minerals and, in that case, there is no royalty. Typical royalty rates in the U. Overriding Royalty Overriding royalty is the same as a royalty, except it does not come about because of ownership of the mineral interest.

An "override" is a classic way for a lease broker or geologist to be compensated for buying leases or putting a deal together. Net Revenue Interest For net revenue interest, the working interest owners pay all of the costs.

The share of the gross production from the well is referred to as "net revenue interest. Net Sales Net sales is the product of gross sales and net revenue interest. It is your share of the production after accounting for shrinkage, royalties, and splitting the proceeds with other working interest owners.

Price Oil is usually priced in U. Be careful to use the same volume units on the sales forecast and the price forecast. There are several "benchmark" crudes in the world, for which the price is reported on a daily basis.A collection of scholarly works about individual liberty and free markets.

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You may include five accounts for each category. Part III. Welcome to the Free Online Calculator Use sitemap. This sitemap was designed to help you to quickly find the desired online calculators and self-calculating tools, worksheets and quizzes on timberdesignmag.com -- without having to scroll through a virtual skyscraper of information (though you still have option to do so).

Like the accounting equation, it shows that a company's total amount of assets equals the total amount of liabilities plus owner's (or stockholders') equity. The income statement is the financial statement that reports a company's revenues and expenses and the resulting net income.

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PREFATORY NOTE Jan 20th, A factless fact table is fact table that does not contain fact. They contain only dimensional keys and it captures events that happen only at information level but not included in the calculations level.
Related BrainMass Content The reason why the father wished to close down the branch was that it appeared to be making a loss. However, it is quite the reverse; if the branch was closed then, the positive contribution from the branch would be lost and overall profits would fall.
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QUERY/ORDER FORM Explain the accounting equation and prepare a table showing the equation and show a list of accounts belonging to each category in the equation. You should include at least five accounts for each category.

A fact table which doesn't contains any facts then called as fact less fact table. generally when we need to merge two data marts one data mart will not have any facts and other one common fact of both usable.

Explain the accounting equation and prepare a table showing the equation
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