Question

Global Co. paid the following for well #1 that was drilled and completed on Block B during 2014:
Drill site preparation $175,000
Surface casing 56,000
Labor for drilling 900,000
Equipment rentals 20,000
Drill bits 190,000
Drilling fluid 30,000
Intermediate casing 300,000
Production Casing 100,000
Tank battery for storage 350,000
Labor to install tank battery 40,000
Flow lines 45,000
Labor to install flow lines 10,000
Christmas tree 200,000
Labor to install Christmas tree 25,000
Tubing 15,000
1. Classify each of the above as either IDC or tangible equipment
2. How will the above costs be reflected on the 12/31/14 balance sheet?

Solution Preview

This material may consist of step-by-step explanations on how to solve a problem or examples of proper writing, including the use of citations, references, bibliographies, and formatting. This material is made available for the sole purpose of studying and learning - misuse is strictly forbidden.

Global Co. paid the following for well #1 that was drilled and completed on Block B during 2014:
Drill site preparation $175,000
Surface casing 56,000
Labor for drilling 900,000
Equipment rentals 20,000
Drill bits 190,000
Drilling fluid 30,000
Intermediate casing 300,000
Production Casing 100,000
Tank battery for storage 350,000
Labor to install tank battery 40,000
Flow lines 45,000
Labor to install flow lines 10,000
Christmas tree 200,000
Labor to install Christmas tree 25,000
Tubing 15,000

1. Classify each of the above as either IDC or tangible equipment
Drill site preparation $175,000 IDC
Surface casing 56,000 Tangible Equipment...

This is only a preview of the solution. Please use the purchase button to see the entire solution

Related Homework Solutions

Business Questions
Homework Solution
$63.00
Accounting
Business
Finance
Economy
Cash Conversion Cycle
Inventory Turnover
Investments
Payments
Sales
Monthly Fee
Annual Fee
Accounting Questions
Homework Solution
$15.00
Accounting
Income
Statement
Balance
Sheet
Rounded
Nearest
Dollar
Assets
Ledger
Account
Liability
Major Types of Stock
Homework Solution
$10.00
Business
Accounting
Major
Types
Stock
Characteristics
Corporations
Financial
Statement
Business Questions
Homework Solution
$20.00
Business
Finance
Accounting
Administration
Cash
Reports
Net Income
Investing Events
Cash Flows
Liabilities
Operations
Statements
Gains
Losses
Assets
Salaries
Turnover
Investors
Creditors
Stocks
Debt
Revenue
P&L and Balance Sheet
Homework Solution
$20.00
Business
Accounting
P&L
Balance
Sheet
Team
Debt
Expenses
Payroll
Cost
Money
Get help from a qualified tutor
Live Chats