King Oil Company has the WI in a fully developed Lease located in Burcan. As of 12/31/2013, the lease had proved developed reserves of 1,200,000 bbl. The net capitalized costs were $15,800,000 with an accumulated DD&A of 3,800,000. During the fourth quarter of 2014, a new reserve study was received which estimated PDR of 1,500,000 bbl as of November 1, 2014. The following is the production during 2014’s quarters .
Quarter production

Q1 30,000
Q2 35,000
Q3 37,000
October 23,000
November 15,000
December 12,000

Required:

1. Calculate DD&A using both two methods illustrated in the chapter.

2. Give the entry to record the DD&A.

3. Prepare the partial B.S as of 12/31/2014.

Answer rating: 100% (QA)

1 Calculate DDA using both two methods illustrated in the chapter The first method would be to calculate the DDA rate by dividing the accumulated DDA ... View the full answer