Johnson Oil & Gas sold 12,500 BBLs of oil for the year 2018 at a price per BBL of $48.Revenues and costs

for Johnson Oil & Gas are presented below:

Revenue

$825,000

G&G Costs

$650,000

Acquisition Costs

$1,500,000

Exploratory dry holes

$3,000,000

Successful exploratory wells

$5,000,000

Development wells, dry

$900,000

Development wells, successful

$735,000

Production facilities

$610,000

Production costs

$200,000

Successful Efforts

Full Cost

Amortization for 2018

$200,000

$400,000

Accumulated DD&A

$500,000

$700,000

Required:

Prepare income statements and unclassified balance sheet for both an SE and FC company, explain the

difference in net income.