Basic Company started operations on 1/1/05. At 12/31/05, the company owned the following leases in Canada: The
Question:
Basic Company started operations on 1/1/05. At 12/31/05, the company owned the following leases in Canada:
The production was sold at \($24/bbl\) and \($1.50/Mcf.\) Current prices at 12/31/05 are \($25/bbl\) and \($2.00/Mcf.\)
Compute DD&A for Canada as follows assuming:
a. No exclusions from the amortization base, and using unit-of-production converted to a common unit of measure based on energy (equivalent Mcf ).
b. No exclusions from the amortization base, and using unit-of-revenue method.
c. All possible costs are excluded from amortization, and using a common unit of measure based on energy (equivalent Mcf ).
d. All possible costs are excluded from amortization, and using unit-of-revenue method.
Step by Step Answer:
Fundamentals Of Oil And Gas Accounting
ISBN: 9780878147939
4th Edition
Authors: Rebecca A. Gallun, Ph.D. Wright, Charlotte J, Linda M. Nichols, John W. Stevenson