Question
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
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 cost on two holes, A and B. Cost Item Cost Drilling $15,000,000 Trenching 6,000,000 Sampling 4,000,000 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. Another amount
b. $0
c. $29,000,000
d. $10,000,000
e. $24,000,000
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