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Geothermal Energy Inc. Revenue and Costs for 2033: Revenue: $1,600,000 G&G Costs: $1,400,000 Acquisition Costs: $6,500,000 Exploratory Dry Holes: $8,500,000 Successful Exploratory Wells: $7,000,000 Development
Geothermal Energy Inc.
Revenue and Costs for 2033:
- Revenue: $1,600,000
- G&G Costs: $1,400,000
- Acquisition Costs: $6,500,000
- Exploratory Dry Holes: $8,500,000
- Successful Exploratory Wells: $7,000,000
- Development Wells, Dry: $3,200,000
- Development Wells, Successful: $3,000,000
- Production Facilities: $1,800,000
- Production Costs: $230,000
Amortization for 2033:
- SE: $420,000
- FC: $750,000
Accumulated DD&A:
- SE: $900,000
- FC: $2,200,000
Required:
- Prepare income statements for a successful-efforts company and a full-cost company.
- Prepare unclassified balance sheets for both companies.
- Explain the difference in net income between the successful-efforts and full-cost companies.
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