Fundamentals of Oil & Gas Accounting 5th Edition by Rebecca Gallun, Charlotte Wright

تمرين 1

Guarantee Oil Company's internal land department incurred costs of $150,000 in
acquiring leases. Of the 1 million acres of prospects, only 450,000 acres were leased.
a. How much, if any, of the $150,000 incurred by the land department should be
capitalized?
b. If capitalized, what account(s) should be debited?