Allen Petroleum drilled an exploratory well in 2018 that was still in progress at year-end. Total costs

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Allen Petroleum drilled an exploratory well in 2018 that was still in progress at year-end. Total costs incurred by 12/31/18 were $500,000. During January 2019, drilling was continued, and additional costs of $230,000 were incurred. Total depth was reached, and the well was determined to be dry by the end of January.

REQUIRED: Assuming Allen’s financial statements are not published until early February, what costs, if any, should be expensed for 2018 and for 2019?

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