Delta Oil Company uses the successful$-$efforts method to account for oil exploration costs. Delta started business in $2014$ and prepared the following income statements:

The company chose to change to the full$-$cost method at the beginning of $2016.$ Under the full$-$cost method, Delta capitalizes all exploration costs of the Oil and Gas

Properties asset account on its balance sheet. It determines the exploration and amortization expense amounts under the full$-$cost method to be as follows:

In addition, Delta reported revenue of $$9,000,000$ and other expenses of $$4,200,000$ in $2016.$ With the $2016$ financial statements, the company issues comparative

statements for the previous $2$ years.

Required:

Jrepare the journal entry to reflect the change.

Prepare the comparative income statements and the comparative statements of retained earnings for $2016,2015,$ and $2014.$ Notes to the

financial statements are not necessary.

DELTA OIL COMPANY

Score: $74/114$

Comparative Income Statements

For the Years Ended December $31,2014-2016$

DELTA OIL COMPANY

Score: $\frac{61}{87}$

Comparative Statements of Retained Earnings

For the Years Ended December $31,2014-2016$