Core Petroleum started its oil and gas exploration and production business in 2015.

During the years 2015 and 2016, the company provided the following information relating to leases located both in the United States and in Canada:

a. Record the above information for both years. Ignore revenue entries.

b. Compute and record DD&A for both years. Assume the revenue method may be ignored in the second year. If there is not a significant difference between the revenue basis and energy basis in the first year (less than $150,000), use the energy basis (equivalent Mcf). Assume that all possible costs are included in DD&A.

c. Compute DD&A using a common unit of measure based on Mcf, assuming Core Oil Company used successful efforts accounting instead of full cost accounting.

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Year 2015 Leasehold costs Lease A (U.S.) $ 40,000 Lease B (U.S.) Lease C (Canada) $ 30,000 Well number IDC Well 1 Well 1 300,000 500,000 L&WE 0 350,000 Results Well dry, abandon well Proved Future development costs 200,000 Production: Oil 4,000 bbl Gas Estimated reserves: Oil, PR 12/31/15 Gas, PR 12/31/15 Oil, PDR 12/31/15 Gas, PDR 2/31/15 Selling price: Oil Gas Price (12/31/15): Oil 20,000 Mcf 50,000 bbl 300,000 Mcf 30,000 bbl 200,000 Mcf $60/bbl $4.50/Mcf $66/bbl Gas $6.00/Mcf