Tech Innovations Co.

Revenue and Costs for 2023:

• Revenue: $850,000
• G&G Costs: $650,000
• Acquisition Costs: $2,200,000
• Exploratory Dry Holes: $4,200,000
• Successful Exploratory Wells: $2,700,000
• Development Wells, Dry: $900,000
• Development Wells, Successful: $750,000
• Production Facilities: $850,000
• Production Costs: $130,000

Amortization for 2023:

• SE: $190,000
• FC: $350,000

Accumulated DD&A:

• SE: $480,000
• FC: $700,000

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.