Revenue and costs for Hopeful Company for the year 2005 are presented below:

Prepare income statements and unclassified balance sheets for a successful-efforts company and a full-cost company and explain the difference in net income.

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Revenue G&G Costs Acquisition costs $ 600,000 600,000 2,000,000 Exploratory dry holes 4,000,000 Successful exploratory wells 3,000,000 Development wells, dry 1,000,000 Development wells, successful 800,000 Production facilities... 700,000 Production costs 100,000 SE FC Amortization for 2005.. 200,000 400,000 Accumulated DD&A 500,000 700,000