Gusher Oil Company began operations on 1/5/2001 and has acquired only two properties.

The two properties, which are both considered significant, are located in different states. Lease B was proved on 1/1/2003. Costs incurred from 1/5/2001 through 12/31/2003 are as follows:

Other information:
The company also owns a building that it purchased 1/1/2001 at a cost of \($500,000.\) The building houses the corporate headquarters and has an estimated life of 20 years (ignore salvage). The operations conducted in the building are general in nature and are not directly attributable to any specific exploration, development, or production activities.
Since the building is not related to exploration, development, or production, it is depreciated using straight-line depreciation for financial accounting.

REQUIRED:

a. Give the entry to record DD&A for 2003 under FC accounting assuming all possible costs are excluded from amortization.

b. Give the entry to record DD&A for 2003 under SE accounting.

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Seismic studies, nondirect Bonus Title exams G&G costs, direct Test well contributions Insurance Lease A Lease B $ 50,000 $ 60,000 Unallocated $ 70,000 10,000 5,000 90,000 80,000 15,000 18,000 2,000 3,000 Exploratory dry holes-IDC 220,000 250,000 Exploratory dry holes-L&WE 30,000 40,000 Exploratory W/P-IDC 100,000 180,000 Exploratory W/P-L&WE 22,000 19,000 Wells and related E&F-IDC 700,000 Wells and related E&F-L&WE 260,000 Tanks and separators 110,000 Lease operating costs 134,000 Total $539,000 $1,859,000 $ 70,000 Additional data Future development costs Proved reserves, 1/1/2003 Proved developed reserves, 1/1/2003 Production during 2003 $ 500,000 600,000 bbl 200,000 bbl 40,000 bbl