In 2018, Aggie Oil Corp. began operations exclusively in the United States, using the full cost method of accounting.
Prepare journal entries, assuming the following transactions in the first three years of operations.
(Please label information as you work through your problem, and perform all calculations IN the cells, cell referencing whenever possible.)
*Calculate DD&A twice:	2018	2019	2020
(1) Assuming no exclusions from the amortization base				Cell reference your final answer here
(2) Assuming all possible exclusions from the amortization base				Cell reference your final answer here,
				then link either (1) or (2) to your journal entries but be consistent!
*Ignore the ceiling test for 2018, but apply it twice for 2019 and 2010:
(1) Assuming no exclusions from the amortization base
(2) Assuming all possible exclusions from the amortization base
You may combine lease information in entries in other words, your journal entries should follow a logical order of sequence as given in the problem (lease first, G&G studies, drill, plug or complete).
2018 (there will be 6 journal entries)	Lease A	Lease B	Lease C
Lease bonuses	$ 50,000	$ 40,000	$ 55,000
G&G costs -- direct	60,000	50,000	90,000
Lease record maintenance	2,000	5,000	1,000
Legal costs for title defense	15,000	-	10,000
Drilling costs		Well 1, Exploratory	Well 1, Exploratory
IDC	-	300,000	150,000
Equipment	-	125,000	40,000
Drilling results	None	Well dry	Drilling incomplete
2019 (there will be 9 journal entries be sure to specify which options above you are using to journalize)
Delay rental	$ 4,000	$ -	$ -
Drilling costs	Well 1, Exploratory	Well 2, Exploratory	Well 1
IDC	275,000	225,000	60,000
Equipment	50,000	50,000	40,000
Drillling results	Completed, successful	Drilling incomplete	Completed, successful
Found proved reserves (bbl)	100,000		300,000
Installed flow lines, tanks, etc.
Installation costs	$ 5,000	$ -	$ 3,000
Purchase costs	30,000	-	45,000
Future development costs	600,000	-	400,000
Production during year (bbl)	4,000	-	6,000
FMV of Lease B		$ 200,000
PV of future net revenue as of 12/31/19	$ 500,000		$ 800,000
2020 (there will be 6 journal entries be sure to specify which options above you are using to journalize)
Drilling costs	Well 2, Developmental	Well 2	Well 2, Developmental
IDC	$ 300,000	$ 5,000	$ 250,000
Equipment	80,000	-	100,000
Drilling results	Dry	Dry, abandoned lease	Completed, successful
Found proved reserves (bbl)			200,000
Future development costs	$ 200,000		$ -
Production during year (bbl)	5,000	-	20,000
FMV of Lease B		$ -
PV of future net revenue as of 12/31/20	$ 1,000,000		$ 3,000,000
Journal entries: (be sure to label all of your work, perform all calculations IN the cells, and cell reference whenever possible)