3:ו Bו Adl .1S3G品回 X88Edit19AF 317: ACCOUNTING FOR OIL AND GASASSIGNMENTSA. Individual assignmentQuestion 1Discuss why successful-efforts method of accounting for oil and gas operations is consideredto follow generally accepted accounting principles.Question 2Both oil and gas are produced from BlowOut Oil Company's lease in Tanzania. Additionalinformation, 1/1/2017:TZS 900,000,000Unrecovered IDC (unamortized IDC)Proved property costs, net.L&W equipment, gross .Beginning of year accumulated DD&A equipment ...100,000,000300,000,00050,000,000Estimated proved reserves, 12/31/2017OilGas .Production during 2017Oil200,000 bbl1,000,000 Mcf10,000 bblGas300,000 Mcf*Intangible Drilling and Development Costs (IDC)*Lease and Well (L&W)Assuming the lease is fully developed, compute amortization:a) assuming oil is the dominant mineralb) using a common unit of measure based on BOEB. Group assignmentQuestion 3Describe the two methods currently used by oil and gas companies to account for future dismantlement,restoration and abandonment costs. Discuss the financial statement consequences of the use of eachmethod.DODםwToolsMobile ViewSharePDF to DOCEdit on PC

Answered: Question 1 Discuss why…

Question 1 Discuss why successful-efforts method of accounting for oil and gas operations is considered to follow generally accepted accounting principles.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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