7 EXERCISE 2ABC Petroleum company incurred the following costs for a development well drilledduring 2011 in a recently acquired concession:Site survey150000Busch clearing500000Road building and bridges2500000Tubing and casing pipes1400000Well head assembly and valves 2100000Flow lines4000000Separators10000000Treaters and heaters2000000Desander1500000Required:1. Prepare journal entries to record the cost of the development well, assuming thecompany uses successful efforts method.Successful effertWells (intangible)315000Wells (equipment)21000000Bank241500002. Eull cost method2

Full Cost Method Under the Full cost method which is described as it allows to capitalize the whole…

1. Prepare journal entries to record the cost of the development well, assuming the company uses successful efforts method. Successful effort Wells (intangible) 315000 Wells (equipment) 21000000 Bank 24150000 2. Eull.cost method ?

1. Prepare journal entries to record the cost of the development well, assuming the company uses successful efforts method. Successful effort Wells (intangible) 315000 Wells (equipment) 21000000 Bank 24150000 2. Eull.cost method ?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 19E

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