Aggie Oil Company began operations in 2006. Give the entries, assuming the following transactions in the first three years of operations. Calculate DD&A twice, once assuming no exclusions and once assuming all possible exclusions from the amortization base.

Ignore the ceiling test for 2006, but apply it for 2007 and 2008. Calculate the ceiling test twice for each of those years, once assuming no exclusions and once assuming all possible exclusions from the amortization base. Assume all leases are located in the United States. You may combine entries.

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Year Transaction Lease A Lease B Lease C 2006 Lease bonuses $ 50,000 $ 40,000 $ 55,000 G&G costs-direct 60,000 50,000 90,000 Lease record maintenance 2,000 5,000 1,000 Legal costs for title defense 15,000 none 10,000 Drilling costs Well 1, Well 1, exploratory exploratory IDC none 300,000 150,000 Equipment none 125,000 40,000 Drilling results none Well dry Drilling uncompleted 2007 Delay rental 4,000 none none Drilling costs Well 1, Well 2, Well 1 exploratory exploratory IDC 275,000 225,000 60,000 Equipment 50,000 50,000 40,000