Revenue and costs for Gravity Petroleum for the year 2019 are presented below:

REQUIRED: Prepare income statements and unclassified balance sheets for a successful efforts (SE) company and a full cost (FC) company and explain the difference in net income.

Transcribed Image Text:

Revenue G&G costs. Acquisition costs Exploratory dry holes.... Successful exploratory wells. Development wells, dry... Development wells, successful Production facilities... Production costs.... Amortization for 2019.... Accumulated DD&A. $ 600,000 600,000 $200,000 500,000 2,000,000 4,000,000 3,000,000 1,000,000 800,000 700,000 100,000 Successful Efforts Full Cost $ 400,000 700,000