The cost of the natural resource under the full cost method. Given information: Payment for the acquire land is $500,000. Cost of development is $325,000. Cost incurred in exploration is $130,000. Cost of producing well is $200,000. Estimated assets obligation is $100,000.

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Answer 1

Question

Chapter 11, Problem 11.41E

a.

To determine

The cost of the natural resource under the full cost method.

Given information:

Payment for the acquire land is $500,000.

Cost of development is $325,000.

Cost incurred in exploration is $130,000.

Cost of producing well is $200,000.

Estimated assets obligation is $100,000.

b.

To determine

To prepare: The journal entries to record the acquisition of the natural resources.

c.

To determine

The amount of the depletion under the units of output method.

Given information:

Cost of resource is $1,125,000.

An estimated total unit of resources is $1,000,000 barrels.

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Use the following information for the next two questions: In 20x1, BUCOLIC RURAL Co. acquired land for a total cost of P40,000,000 to be used to quarry marble, limestone, and construction aggregates. Costs incurred to obtain legal right to explore the property amounted to P8,000,000. Expenditures incurred in the exploration for and evaluation of mineral resources before technical feasibility and commercial viability of extracting a mineral resource are demonstrable totaled P12,000,000. Intangible development costs of drilling, tunnels, shafts, and wells before the actual production totaled P20,000,000. BUCOLIC Co. estimates that total recoverable reserves are 100,000,000 units. Furthermore, BUCOLIC Co. expects to sell the land for P4,800,000 after resource is depleted. However, no buyer will pay this price unless the mine is drained, filled and leveled, a process that will cost P800,000. It is BUCOLIC's policy to capitalize all exploration costs. Actual units quarried in 20x1 through…

PLEASE PROVIDE THE SOLUTIONS FOR THE CORRECT ANSWERS!!! In 20x1, BUCOLIC RURAL Co. acquired land for a total cost of ₱40,000,000 to be used to quarrymarble, limestone, and construction aggregates. Costs incurred to obtain legal right to explore theproperty amounted to ₱8,000,000. Expenditures incurred in the exploration for and evaluation ofmineral resources before technical feasibility and commercial viability of extracting a mineralresource are demonstrable totaled ₱12,000,000. Intangible development costs of drilling, tunnels,shafts, and wells before the actual production totaled ₱20,000,000. BUCOLIC Co. estimates that totalrecoverable reserves are 100,000,000 units. Furthermore, BUCOLIC Co. expects to sell the land for₱4,800,000 after resource is depleted. However, no buyer will pay this price unless the mine isdrained, filled and leveled, a process that will cost ₱800,000. It is BUCOLIC’s policy to capitalize allexploration costs.Actual units quarried in 20x1 through 20x4 totaled…

Devo Oil Company acquired property rights to search for natural resources on land that it is convinced has oil reserves, for $15,400,000. The contract requires that Devo restore the property to a status usable for a park after drilling and extraction are complete. The estimated cost of this restoration is $2,350,000. Devo incurs exploration costs of $1,320,000 and intangible development costs of $1,535,000. Geological surveys suggest that approximately 1,100,000 barrels of oil can be extracted from the site. In 2025, Devo extracts 235,000 barrels of oil. Instructions (4) If 150,000 barrels of oil are sold within the initial year, what is the cost of goods sold for the oil and the remaining inventory balance?

Answer 2

Question

Chapter 11, Problem 11.41E

a.

To determine

The cost of the natural resource under the full cost method.

Given information:

Payment for the acquire land is $500,000.

Cost of development is $325,000.

Cost incurred in exploration is $130,000.

Cost of producing well is $200,000.

Estimated assets obligation is $100,000.

b.

To determine

To prepare: The journal entries to record the acquisition of the natural resources.

c.

To determine

The amount of the depletion under the units of output method.

Given information:

Cost of resource is $1,125,000.

An estimated total unit of resources is $1,000,000 barrels.

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Answer 3

Question

Chapter 11, Problem 11.41E

a.

To determine

The cost of the natural resource under the full cost method.

Given information:

Payment for the acquire land is $500,000.

Cost of development is $325,000.

Cost incurred in exploration is $130,000.

Cost of producing well is $200,000.

Estimated assets obligation is $100,000.

b.

To determine

To prepare: The journal entries to record the acquisition of the natural resources.

c.

To determine

The amount of the depletion under the units of output method.

Given information:

Cost of resource is $1,125,000.

An estimated total unit of resources is $1,000,000 barrels.

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Answer 4

Question

Chapter 11, Problem 11.41E

a.

To determine

The cost of the natural resource under the full cost method.

Given information:

Payment for the acquire land is $500,000.

Cost of development is $325,000.

Cost incurred in exploration is $130,000.

Cost of producing well is $200,000.

Estimated assets obligation is $100,000.

b.

To determine

To prepare: The journal entries to record the acquisition of the natural resources.

c.

To determine

The amount of the depletion under the units of output method.

Given information:

Cost of resource is $1,125,000.

An estimated total unit of resources is $1,000,000 barrels.

Expert Solution & Answer

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Answer 5

Chapter 11, Problem 11.41E

a.

To determine

The cost of the natural resource under the full cost method.

Given information:

Payment for the acquire land is $500,000.

Cost of development is $325,000.

Cost incurred in exploration is $130,000.

Cost of producing well is $200,000.

Estimated assets obligation is $100,000.

b.

To determine

To prepare: The journal entries to record the acquisition of the natural resources.

c.

To determine

The amount of the depletion under the units of output method.

Given information:

Cost of resource is $1,125,000.

An estimated total unit of resources is $1,000,000 barrels.

Answer 6

Chapter 11, Problem 11.41E

a.

To determine

The cost of the natural resource under the full cost method.

Given information:

Payment for the acquire land is $500,000.

Cost of development is $325,000.

Cost incurred in exploration is $130,000.

Cost of producing well is $200,000.

Estimated assets obligation is $100,000.

Answer 7

Chapter 11, Problem 11.41E

a.

To determine

The cost of the natural resource under the full cost method.

Given information:

Payment for the acquire land is $500,000.

Cost of development is $325,000.

Cost incurred in exploration is $130,000.

Cost of producing well is $200,000.

Estimated assets obligation is $100,000.

Answer 8

b.

To determine

To prepare: The journal entries to record the acquisition of the natural resources.

Answer 9

b.

To determine

To prepare: The journal entries to record the acquisition of the natural resources.

Answer 10

c.

To determine

The amount of the depletion under the units of output method.

Given information:

Cost of resource is $1,125,000.

An estimated total unit of resources is $1,000,000 barrels.

Answer 11

c.

To determine

The amount of the depletion under the units of output method.

Given information:

Cost of resource is $1,125,000.

An estimated total unit of resources is $1,000,000 barrels.

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

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Answer 15

Ch. 11 - Stephen J. Cosgrove is the Former Vice President....Ch. 11 - Prob. 11.2Q Ch. 11 - Prob. 11.3Q Ch. 11 - Prob. 11.4Q Ch. 11 - Will the expense/capitalization choice impact...Ch. 11 - Prob. 11.6Q Ch. 11 - Prob. 11.7Q Ch. 11 - For a long-lived operating asset acquired by...Ch. 11 - Prob. 11.9Q Ch. 11 - Prob. 11.10Q

The cost of the natural resource under the full cost method. Given information: Payment for the acquire land is $500,000. Cost of development is $325,000. Cost incurred in exploration is $130,000. Cost of producing well is $200,000. Estimated assets obligation is $100,000.

Solution Summary: The author explains how the successful efforts method calculates the cost of the development, exploration, and acquisition of natural resources.

Concept explainers

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The cost of the natural resource under the full cost method.

Given information:

Payment for the acquire land is $500,000.

Cost of development is $325,000.

Cost incurred in exploration is $130,000.

Cost of producing well is $200,000.

Estimated assets obligation is $100,000.

To prepare: The journal entries to record the acquisition of the natural resources.

The amount of the depletion under the units of output method.

Given information:

Cost of resource is $1,125,000.

An estimated total unit of resources is $1,000,000 barrels.

Want to see the full answer?

Chapter 11 Solutions

The cost of the natural resource under the full cost method. Given information: Payment for the acquire land is $500,000. Cost of development is $325,000. Cost incurred in exploration is $130,000. Cost of producing well is $200,000. Estimated assets obligation is $100,000.

Solution Summary: The author explains how the successful efforts method calculates the cost of the development, exploration, and acquisition of natural resources.

Concept explainers

Videos

The cost of the natural resource under the full cost method. Given information: Payment for the acquire land is $500,000. Cost of development is $325,000. Cost incurred in exploration is $130,000. Cost of producing well is $200,000. Estimated assets obligation is $100,000.

To prepare: The journal entries to record the acquisition of the natural resources.

The amount of the depletion under the units of output method. Given information: Cost of resource is $1,125,000. An estimated total unit of resources is $1,000,000 barrels.

Want to see the full answer?

Chapter 11 Solutions

The cost of the natural resource under the full cost method.

Given information:

Payment for the acquire land is $500,000.

Cost of development is $325,000.

Cost incurred in exploration is $130,000.

Cost of producing well is $200,000.

Estimated assets obligation is $100,000.

The amount of the depletion under the units of output method.

Given information:

Cost of resource is $1,125,000.

An estimated total unit of resources is $1,000,000 barrels.