Duncan Oil Company, a successful efforts company, has capitalized costs on Property R, Property S, and Property T as of 12/31/2017 as follows:

Duncan has no other capitalized costs. The properties are located in different regions in Venezuela.

REQUIRED: If necessary, test the assets for impairment and make any necessary journal entries, assuming production costs tripled late in the year on all three properties and that production costs are not expected to decrease.

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Property R Property S Property T Net capitalized costs $300,000 $600,000 $400,000 Expected undiscounted future net cash flows 200,000 630,000 380,000 Fair value (discounted future net cash flows) 160,000 540,000 320,000