2017 $1,000,000 2018 $3,000,000 Revenue Other expenses Exploration expenses 400,000 1,300,000 120,000 238,000 $1,462,000 Income before income taxes $ 480,000 Income tax expense (21%) 100,800 307,020 $379,200 $1,154,980 11.55 Net income Earnings per share 3.79 The company chooses to change to the full-cost method at the beginning of 2019. Under the full-cost method, Delta capitalizes all exploration costs of the Oil and Gas Properties asset account on its balance sheet. It deter- mines the exploration and amortization expense amounts under the full-cost method to be as follows: 2017 2018 2019 Exploration expense Amortization expense $ 0 8,000 $ 0 18,200 $ 0 42,000 In addition, Delta reported revenue of $9,000,000 and other expenses of $4,200,000 in 2019. With the 2019 financial statements, the company issues comparative statements for the previous 2 years.

2017 $1,000,000 2018 $3,000,000 Revenue Other expenses Exploration expenses 400,000 1,300,000 120,000 238,000 $1,462,000 Income before income taxes $ 480,000 Income tax expense (21%) 100,800 307,020 $379,200 $1,154,980 11.55 Net income Earnings per share 3.79 The company chooses to change to the full-cost method at the beginning of 2019. Under the full-cost method, Delta capitalizes all exploration costs of the Oil and Gas Properties asset account on its balance sheet. It deter- mines the exploration and amortization expense amounts under the full-cost method to be as follows: 2017 2018 2019 Exploration expense Amortization expense $ 0 8,000 $ 0 18,200 $ 0 42,000 In addition, Delta reported revenue of $9,000,000 and other expenses of $4,200,000 in 2019. With the 2019 financial statements, the company issues comparative statements for the previous 2 years.

Fundamentals of Financial Management (MindTap Course List)

15th Edition

ISBN:9781337395250

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter4: Analysis Of Financial Statements

Section: Chapter Questions

Problem 24P: Income Statement for Year Ended December 31, 2018 (Millions of Dollars) Net sales 795.0 Cost of...

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