During the year ended 30 June 2018, Lopma Ltd acquired an area-of-interest (Oil-X). The exploration and...

 

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During the year ended 30 June 2018, Lopma Ltd acquired an area-of-interest (Oil-X). The exploration and evaluation activities at Oil-X amounted to $52,000,000. In the year ending 30 June 2019, oil was discovered at Oil-X. It is estimated that site X has 3,000,000 barrels of oil. As a result, Lopma Ltd erected an oil rig at Oil-X on 1 July 2016. The cost of the oil rig amounted to $9,000,000. The oil rig commenced production on 1 July 2019. At the end of the production at Oil-X, Lopma Ltd is required to dismantle the oil rig, remove it and return the site to its original condition. Lopma Ltd estimates that the present value of the removal and restoration costs relating to the development and construction activities will be $6,930,216. By 30 June 2020, 750,000 barrels of oil are extracted at a production cost of $220,000. What was the value of inventory produced for the year ended 30 June 2020? SELECT ONE CORRECT RESPONSE Select one: a. $17,202,554 b. $15,470,000 c. $12,420,000 d. $16,406,043 e. $16,982,554 During the year ended 30 June 2018, Lopma Ltd acquired an area-of-interest (Oil-X). The exploration and evaluation activities at Oil-X amounted to $52,000,000. In the year ending 30 June 2019, oil was discovered at Oil-X. It is estimated that site X has 3,000,000 barrels of oil. As a result, Lopma Ltd erected an oil rig at Oil-X on 1 July 2016. The cost of the oil rig amounted to $9,000,000. The oil rig commenced production on 1 July 2019. At the end of the production at Oil-X, Lopma Ltd is required to dismantle the oil rig, remove it and return the site to its original condition. Lopma Ltd estimates that the present value of the removal and restoration costs relating to the development and construction activities will be $6,930,216. By 30 June 2020, 750,000 barrels of oil are extracted at a production cost of $220,000. What was the value of inventory produced for the year ended 30 June 2020? SELECT ONE CORRECT RESPONSE Select one: a. $17,202,554 b. $15,470,000 c. $12,420,000 d. $16,406,043 e. $16,982,554

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