Creamy Oil Inc. noticed a pipeline leak. While there is no specific claim asserted, the company determines the remediation cost would be $2,300,000. The company:

A. should recognize an environmental remediation liability of $2,300,000.

B. is required to disclose this situation but not to recognize a liability.

C. is not required to recognize the liability at this moment.

D. is required to recognize the liability only when a litigation is brought to the court.

Texarkana Oil Corp., a successful efforts company, considers its Alpha Field as an asset group for purposes of testing for impairment. If the carrying value of Alpha Field exceeds the discounted future net cash flows associated with the Field,

A. the asset is impaired.

B. the impairment loss is the difference between the carrying value of the Field and the fair value of the Field.

C. the company may or may not have to recognize an impairment loss.

D.All of the above are correct.

Oilimpia Co., a successful efforts company, classifies one of its platforms as being held for sale.The platform has a net carrying value of $6,800,000, although its fair value is $6,850,000. The company estimates that the selling cost is $320,000. The company should recognize:

A. a gain of $50,000.

B. a loss of $270,000.

C. a loss of $320,000.

D.neither a gain nor a los

An oil company plans to sell its facility before the end of its useful life.

A. The company is not required to recognize the asset retirement obligation associated with this asset.

B. The company is required to recognize the asset retirement obligation associated with this asset, if applicable.

C. If the company is a full cost company, it is not required to recognize the asset retirement obligation associated with this asset.

D.If the company is a successful efforts company, it is not required to recognize the asset retirement obligation associated with this asset.

The following information is related to one of an oil company's long-lived asset, Equip A. The company follows the successful efforts accounting. What is the impairment amount that the company should recognize?

Long-lived asset - Equip A $360,000

Accumulated depreciation - Long-lived asset (Equip A)120,000

Undiscounted future net cash flows from Equip A250,000

Fair value of Equip A200,000

A. $0.

B. $10,000.

C. $40,000.

D.$50,000.