During 2020, ABC Company was exploring oil in three holes: A, B, and C. The company paid $2,000,000 for the initial license and $10,000,000 for other the pre-exploration cost. Following this step, the company paid $20,000,000 for exploration license, $8,000,000 to lease the land, and estimated the cost of restoration the land by $2,000,000. The exploration costs of A, B, and C holes were $30,000,000, $50,000,000, and $10,000,000 respectively.

The company found out that holes A and C are an economically feasible and estimated that the quantity that can be extracted from these two holes over the coming 10 years is 14,000,000 Barrel of oil. During the year the company extracted 2,000,000 barrels of oil and sold 1,800,000 of them at $50/barrel. Total production cost during 2020 was $24,000,000. The company uses successful effort method.

Required:

1. What is total exploration cost that must be capitalized.

2. Calculate depletion cost per barrel.

3. Calculate the depletion expense for 2020.

4. Calculate the total cost per barrel for 2020.

5. Calculate the sales revenues, cost of goods sold, and the cost of ending inventory.

6. Show the effect on the financial statements on 31/12/2020.