Wildcat Oil Company began operations on January 1, 20XA. The following facts relate to Wildcat’s first two years of operations. All reserve and production quantities apply only to Wildcat Oil’s interest.

Assume a tax rate of 40% and that Wildcat does not qualify for percentage depletion because it is an integrated producer. For purposes of the required capitalization and amortization of 30% of IDC, assume nine months of amortization in 20XA. Because of the short lives of Lease R and Lease S, also assume Wildcat elects to use the unit-ofproduction method for calculating depreciation. Use proved reserves for depletion and proved developed reserves for depreciation. Ignore the alternative minimum tax and deferred taxes. (What is the significance of no estimated future development costs on Lease R and Lease S as of 12/31/XB?)

a. Prepare the required disclosures under SFAS No. 69, assuming Wildcat is a successful efforts company.

b. Assume instead that Wildcat is a full cost company that amortizes all possible costs. Prepare only those disclosures that would differ under full cost accounting compared to successful efforts.

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Item a. Acquisition costs b. G&G costs C. Drilling costs: IDC Tangible Life of equipment d. Drilling results: 12/31/20XA Lease R Lease S Lease T $ 50,000 $ 40,000 $ 60,000 $ 30,000 $ 35,000 $ 40,000 $160,000 80,000 10 years $100,000 $135,000 $10,000 Proved reserves Incomplete Dry