QuestionQuestion

The following were incurred by Peters Co. in 2016, all specifically for Block A. Prepare and income statement ignoring taxes and a partial balance sheet using
(1) successful-efforts (U.S. GAAP)
(2) full-cost (U.S. GAAP)
Signing bonus $ 50,000
G&G 200,000
Exploratory dry hole 600,000
Successful exploratory well 1,800,000
Development dry hole 1,200,000
Production platform 5,000,000
Lifting costs 450,000
DD&A expense 100,000 (SE); 140,000 (FC)
Accumulated DD&A 275,000 (SE); 410,000 (FC)
Revenue from sale of oil 2,100,000

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Signing bonus $ 50,000 Acquisition Cost -capitalized under both methods
G&G 200,000 Predrilling costs - expensed under both methods
Exploratory dry hole 600,000 Expensed under SE. Capitalized under FC
Successful exploratory well 1,800,000 Capitalized under both methods...
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