What oil exploration expense should be reported in income

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During the current year, Long Company incurred P5,000,000 in exploration cost for each of 20 oil wells drilled in the current year in West Mindanao. Of the 20 wells drilled, 14 were dry holes. The entity used the successful effort method of accounting. None of the oil found is depleted in the current year.

Problem 1: What oil exploration expense should be reported in the income statement for the current year?

a. 50,000,000

b. 30,000,000

c. 70,000,000

d. 0

Reference no: EM132789494

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