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In 2010 the lawrence company spends 4 million drilling oil

In 2010, the Lawrence Company spends $4 million drilling oil wells. Sixty percent of the drilling is successful and results in commercial quantities of oil being found.

Required:
1. How much drilling expense does the company recognize under

a. The successfulefforts method?

b. The fullcost method?

2. At what value does the company report the asset, Oil and Gas Properties, in its balance sheet under

a. The successfulefforts method?

b. The fullcost method?

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Accounting Basics: In 2010 the lawrence company spends 4 million drilling oil

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