In 2010, Hart Co.invested $4, 000, 000 in oil well exploration activities.Seventy percent of the drilling was successful and resulted in commercial quantities of oil being found.
Required:
a. Inchcate the amount of driling expense Hart Co. would recognize in 2010 if the fill-cost method is in use.
b. Indicate the cost that would be reponted on the balance sheet as oil and gas properties if the successful-efforts method is in use.

Question

In 2010, Hart Co.invested $4, 000, 000 in oil well exploration activities.Seventy percent of the drilling was successful and resulted in commercial quantities of oil being found.
Required:
 a. Inchcate the amount of driling expense Hart Co. would recognize in 2010 if the fill-cost method is in use.
b. Indicate the cost that would be reponted on the balance sheet as oil and gas properties if the successful-efforts method is in use.

Quizplus · Accepted Answer

The Answer of In 2010, Hart Co.invested $4, 000, 000 in oil well exploration activities.Seventy percent of the drilling was successful and resulted in commercial quantities of oil being found.
Required:
 a. Inchcate the amount of driling expense Hart Co. would recognize in 2010 if the fill-cost method is in use.
b. Indicate the cost that would be reponted on the balance sheet as oil and gas properties if the successful-efforts method is in use.