Data for Hill Oil Company are as follows for all US properties:Nondrilling evaluation costs of unproved property-direct..Abandoned costsDry holes on unproved propertyCapitalized costs of proved property..Costs of major development project (costs not included above)Accumulated DD&A (assume same for part a and part b)...Deferred income taxes..PV of future gross revenuePV of future related costs.Acquisition costs of unproved property, net of impairment.. $ 300,000400,000100,000600,0002,400,000800,000700,000500,0004,100,0001,400,000500,000550,000...........................Income tax effects-books versus tax.LCM of unproved properties...REQUIRED:a. Apply the full cost ceiling test and record any entries necessary, assumingthat all possible costs are excluded from amortization.Apply the full cost ceiling test and record any entries necessary, assumingthat all possible costs are being amortized.

Cost accounting: The branch of accounting that provides the information regarding the cost incurred…

REQUIRED: a. Apply the full cost ceiling test and record any entries necessary, assuming that all possible costs are excluded from amortization. b. Apply the full cost ceiling test and record any entries necessary, assuming that all possible costs are being amortized.

REQUIRED: a. Apply the full cost ceiling test and record any entries necessary, assuming that all possible costs are excluded from amortization. b. Apply the full cost ceiling test and record any entries necessary, assuming that all possible costs are being amortized.

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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Question

Data for Hill Oil Company are as follows for all US properties:
Nondrilling evaluation costs of unproved property-direct..
Abandoned costs
Dry holes on unproved property
Capitalized costs of proved property..
Costs of major development project (costs not included above)
Accumulated DD&A (assume same for part a and part b)...
Deferred income taxes..
PV of future gross revenue
PV of future related costs.
Acquisition costs of unproved property, net of impairment.. $ 300,000
400,000
100,000
600,000
2,400,000
800,000
700,000
500,000
4,100,000
1,400,000
500,000
550,000
...
....
....
......
....
......
Income tax effects-books versus tax.
LCM of unproved properties...
REQUIRED:
a. Apply the full cost ceiling test and record any entries necessary, assuming
that all possible costs are excluded from amortization.
Apply the full cost ceiling test and record any entries necessary, assuming
that all possible costs are being amortized.

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