1- ABC Company obtained an exploration license to search for oil in a certain area with a $10,000,000 cost. The cost to lease the land was $3,000,000 and estimated restoration cost was $1,000,000. In addition, the company paid the following exploration costs on two holes, A and B.

Cost Item Cost

Drilling $15,000,000

Trenching 10,000,000

Sampling 5,000,000

If the company found oil only on hole A, which represents 60% of the exploration cost, total cost that must be expensed under successful effort method is:

Select one:

a. $15,000,000

b. Another amount

c. $18,000,000

d. $6,000,000

e. $12,000,000

2-A, B and C are partners in ABC partnership with capital balances of KD 100,000, KD 60,000, and KD 40,000 respectively. The income distribution ratio between A, B and C is 5:3:2. Partner C withdraws from the partnership and receives a cash payment of KD 55,000 from partner B. The capital of partner B after withdrawal of C is:

Select one:

a. Another amount

b. KD 100,000

c. KD 140,000

d. KD 170,000

3- Following the initial studies and research, the company decided a high potential to extract oil from a particular area. Therefore, the company Applied for Exploration License. The company obtained the exploration license for $75,000,000. It leased 20 Km of land for $20,000,000. The estimated cost of restoration the land when completing the project was $4,000,000. The required journal entries include:

Select one:

a. Debit of restoration expense for $4,000,000

b. Debit of exploration license for $95,000,000

c. None of the answers

d. Debit for cash account for $95,000,000

4- ABC Company obtained an exploration license to search for oil in a certain area with a $10,000,000 cost. The cost to lease the land was $5,000,000 and estimated restoration cost was $3,000,000. In addition, the company paid the following exploration costs on two holes, A and B.

Cost Item Cost

Drilling $20,000,000

Trenching 15,000,000

Sampling 10,000,000

If the company found oil only on hole A, which represents 80% of the exploration cost, total cost that must be capitalized under successful effort method is:

Select one:

a. $42,000,000

b. $54,000,000

c. $50,000,000

d. Another amount

e. $46,000,000

Please answer all questions.