How to calculate taxable income under expensing/capitalization methods handling IDC?

[joystar77]

61. Chris purchased an oil interest for $2 million. Recoverable barrels were estimated to be 500,000. During the year, 120,000 barrels were sold for $3.84 million, regular expenses (including cost recovery) were $1.24 million, and IDC were $1 million. Calculate Chris’s taxable income under the expensing and capitalization methods of handling IDC

 

[kirby]

What's going on with all these questions, Joystar? Professor letting you turn in all your past due homework??

 

[joystar77]

Hello Kirby, No the homework is not past due. I am taking an online course for Accounting and having trouble understanding how to come up with the correct calculations for these questions.

 

[kirby]

Given all that you have posted, I suggest that the online method is not an optimal way for you to learn this subject. What are your thoughts on that?

 

[joystar77]

Dear Kirby, You are more than likely right, but it is too late for me to drop the course because it is passed the withdrawal date. I will probably speak with my academic advisor/counselor about this course. I need to finish up these questions for our final review.