Cementing services…………………………………………………………..10,000
Casing crews…………………………………………………………………….12,000
Roustabout labor……………………………………………………………..16,000
Hauiling and transportation……………………………………………..15,000
Production casing…………………………………………………………….72,000
Tank battery…………………………………………………………………….22,000
Lines and connections……………………………………………………..11,000
Pumping unit motor and accessories……………………………..100,000
Casinghead and connections……………………………………………13,000
Tubing……………………………………………………………………………..17,000
Separating and treating equipment…………………………………14,200
Measuring equipment………………………………………………………….600
Downhole pump and rods……………………………………………….11,200
Required:
a. Classify the costs in b into IDC and L&WE.
b. Record the above transaction assuming that the well was successful.
c. Record the above transaction assuming that the well was dry if the Company paid cost of $70,000 to plug and abandoned the hole.
Hint: to save your time, you can record the IDC and L&WE in total not for each cost.
| OVERHEADS | IDC | L&WE |
| Cementing services | 10,000 | |
| Casing crews | 12,000 | |
| Roustabout labor | 16,000 | |
| Hauiling and transportation | 15,000 | |
| Production casing | 72,000 | |
| Tank battery… | 22,000 | |
| Lines and connections | 11,000 | |
| Pumping unit motor and accessories | 1,00,000 | |
| Casinghead and connections | 13,000 | |
| Tubing | 17,000 | |
| Separating and treating equipment | 14,200 | |
| Measuring equipment | 600 | |
| Downhole pump and rods | 11,200 |
total cost 153,000 148,000
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