24. +4 Data for Hill Oil Company are as follows for all US properties: Acquisition costs of unproved property, net of impairment. . $ 300,000 Nondrilling evaluation costs of unproved property-direct .. 400,000 Abandoned costs.... 100,000 Dry holes on unproved property 600,000 Capitalized costs of proved property.. 2,400,000 Costs of major development project (costs not included above) 800,000 Accumulated DD&A (assume same for part a and part b)... Deferred income taxes... PV of future gross revenue PV of future related costs... Income tax effects-books versus tax. LCM of unproved properties... 700,000 500,000 4,100,000 1,400,000 500,000 550,000 REQUIRED: a. Apply the full cost ceiling test and record any entries necessary, assuming that all possible costs are excluded from amortization. b. Apply the full cost ceiling test and record any entries necessary, assuming that all possible costs are being amortized.
24. +4 Data for Hill Oil Company are as follows for all US properties: Acquisition costs of unproved property, net of impairment. . $ 300,000 Nondrilling evaluation costs of unproved property-direct .. 400,000 Abandoned costs.... 100,000 Dry holes on unproved property 600,000 Capitalized costs of proved property.. 2,400,000 Costs of major development project (costs not included above) 800,000 Accumulated DD&A (assume same for part a and part b)... Deferred income taxes... PV of future gross revenue PV of future related costs... Income tax effects-books versus tax. LCM of unproved properties... 700,000 500,000 4,100,000 1,400,000 500,000 550,000 REQUIRED: a. Apply the full cost ceiling test and record any entries necessary, assuming that all possible costs are excluded from amortization. b. Apply the full cost ceiling test and record any entries necessary, assuming that all possible costs are being amortized.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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