Data for Hill Oil Company are as follows for all US properties: Acquisition costs of unproved...

 

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Data for Hill Oil Company are as follows for all US properties: Acquisition costs of unproved property, net of impairment.. $ 300,000 400,000 Nondrilling evaluation costs of unproved property-direct.. Abandoned costs 100,000 600,000 ***** Dry holes on unproved property Capitalized costs of proved property.. Costs of major development project (costs not included above) 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... 2,400,000 800,000 700,000 500,000 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. Data for Hill Oil Company are as follows for all US properties: Acquisition costs of unproved property, net of impairment.. $ 300,000 400,000 Nondrilling evaluation costs of unproved property-direct.. Abandoned costs 100,000 600,000 ***** Dry holes on unproved property Capitalized costs of proved property.. Costs of major development project (costs not included above) 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... 2,400,000 800,000 700,000 500,000 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.

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Answer A All possible costs are excluded from amortization amortizable values acquasition cost of ... View the full answer