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Data for Hill Oil Company are as follows for all US properties: Acquisition costs of unproved property, net of impairment .. $ 300,000 Nondrilling evaluation

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Data for Hill Oil Company are as follows for all US properties: Acquisition costs of unproved property, net of impairment .. $ 300,000 Nondrilling evaluation costs of unproved property-direct.. 400,000 Abandoned costs ....... 100,000 Dry holes on unproved property 600,000 Capitalized costs of proved property.... 2,400,000 Costs of major development project (costs not included above) 800,000 Accumulated DD&A (assume same for part a and part b)... 700,000 Deferred income taxes ............... 500,000 PV of future gross revenue 4,100,000 PV of future related costs.... he 1,400,000 Income tax effects-books versus ta 500,000 u s LCM of unproved properties .... 550,000 REQUIRED: a. Apply the full cost ceiling test and record any entries necessary, assuming that all possible costs are excluded from amortization. b. Apply the full cost ceiling test and record any entries necessary, assuming that all possible costs are being amortized. PART A. Capitalized Costs Amount TOTAL PART B. Capitalized Costs Part a Part b TOTAL ENTRY for PART A ENTRY for PART B ENTRY for PARTA ENTRY for PART B Data for Hill Oil Company are as follows for all US properties: Acquisition costs of unproved property, net of impairment .. $ 300,000 Nondrilling evaluation costs of unproved property-direct.. 400,000 Abandoned costs ....... 100,000 Dry holes on unproved property 600,000 Capitalized costs of proved property.... 2,400,000 Costs of major development project (costs not included above) 800,000 Accumulated DD&A (assume same for part a and part b)... 700,000 Deferred income taxes ............... 500,000 PV of future gross revenue 4,100,000 PV of future related costs.... he 1,400,000 Income tax effects-books versus ta 500,000 u s LCM of unproved properties .... 550,000 REQUIRED: a. Apply the full cost ceiling test and record any entries necessary, assuming that all possible costs are excluded from amortization. b. Apply the full cost ceiling test and record any entries necessary, assuming that all possible costs are being amortized. PART A. Capitalized Costs Amount TOTAL PART B. Capitalized Costs Part a Part b TOTAL ENTRY for PART A ENTRY for PART B ENTRY for PARTA ENTRY for PART B

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