Oil and Gas Exploration Costs

The company started business on January 1 and during the year had oil and gas exploration costs of $500,000. Of these costs, $100,000 was associated with successful wells and $400,000 with so-called dry holes. For simplicity, assume that all of the costs were incurred on December 31.

Compute the total oil and gas exploration expense to be reported for the year, assuming that the company uses the successful efforts method. $

Compute the total oil and gas exploration expense to be reported for the year, assuming that the company uses the full cost method. $