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1. Garvin Oil Company incurred the following costs during the years 2018 and 2019: 2018 a. Contracted and paid $50,000 for G&G surveys during the

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1. Garvin Oil Company incurred the following costs during the years 2018 and 2019: 2018 a. Contracted and paid $50,000 for G&G surveys during the year. b. Leased acreage in four areas as follows: 1) Marrow lease-500 acres @ $50 /acre bonus; other acquisition costs, $2,000 2) Richards lease-800 acres @ $100/ acre bonus; other acquisition costs, $3,000 3) Onyx lease-200 acres @ $60 /acre bonus; other acquisition costs, $500 4) Raupe lease-600 acres @ $30/ acre bonus; other acquisition costs, $800 Each lease had a delay rental clause requiring payment of $10 per acre if drilling was not commenced by the end of one year. Also, each of the above leases was considered individually significant. c. The company also leased 10 individual tracts for a total consideration of $60,000. The tracts are considered to be individually insignificant and are the first individually insignificant unproved properties acquired by Garvin. d. The company incurred $1,000 in costs to maintain lease and land records in 2018. 1. Garvin Oil Company incurred the following costs during the years 2018 and 2019: 2018 a. Contracted and paid $50,000 for G&G surveys during the year. b. Leased acreage in four areas as follows: 1) Marrow lease-500 acres @ $50 /acre bonus; other acquisition costs, $2,000 2) Richards lease-800 acres @ $100/ acre bonus; other acquisition costs, $3,000 3) Onyx lease-200 acres @ $60 /acre bonus; other acquisition costs, $500 4) Raupe lease-600 acres @ $30/ acre bonus; other acquisition costs, $800 Each lease had a delay rental clause requiring payment of $10 per acre if drilling was not commenced by the end of one year. Also, each of the above leases was considered individually significant. c. The company also leased 10 individual tracts for a total consideration of $60,000. The tracts are considered to be individually insignificant and are the first individually insignificant unproved properties acquired by Garvin. d. The company incurred $1,000 in costs to maintain lease and land records in 2018

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