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

تمرين 6

Wildcat Oil Company began operations on January 1, 20XA. The following facts relate
to Wildcat's first two years of operations. All reserve and production quantities apply
only to Wildcat Oil's interest. Assume a tax rate of 40% and that Wildcat does not qualify for percentage depletion
because it is an integrated producer. For purposes of the required capitalization and
amortization of 30% of IDC, assume nine months of amortization in 20XA. Because
of the short lives of Lease R and Lease S, also assume Wildcat elects to use the unit-of-
production method for calculating depreciation. Use proved reserves for depletion and
proved developed reserves for depreciation. Ignore the alternative minimum tax and
deferred taxes. (What is the significance of no estimated future development costs on
Lease R and Lease S as of 12/31/XB?)
a. Prepare the required disclosures under SFAS No. 69, assuming Wildcat is a
successful efforts company.
b. Assume instead that Wildcat is a full cost company that amortizes all possible
costs. Prepare only those disclosures that would differ under full cost accounting
compared to successful efforts.