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The Polecat Company incurred costs of $6 million in 2009 drilling oil wells. Thirty percent of the drilling resulted in oil being found. The rest
The Polecat Company incurred costs of $6 million in 2009 drilling oil wells. Thirty percent of the drilling resulted in oil being found. The rest of the drilling was unsuccessful. If Polecat uses the successful efforts method of accounting, Oil and Gas Properties will be valued on the 2009 ending balance sheet at:
a) $1,800,000.
b) $6,000,000
c) $4,200,000.
d) $3,000,000.
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