Green Energy Corp.

Revenue and Costs for 2028:

• Revenue: $1,100,000
• G&G Costs: $950,000
• Acquisition Costs: $4,000,000
• Exploratory Dry Holes: $6,000,000
• Successful Exploratory Wells: $4,500,000
• Development Wells, Dry: $2,000,000
• Development Wells, Successful: $1,700,000
• Production Facilities: $1,300,000
• Production Costs: $180,000

Amortization for 2028:

• SE: $270,000
• FC: $500,000

Accumulated DD&A:

• SE: $650,000
• FC: $1,200,000

Required:

1. Prepare income statements for a successful-efforts company and a full-cost company.
2. Prepare unclassified balance sheets for both companies.
3. Explain the difference in net income between the successful-efforts and full-cost companies.