Write down essential journal entries using area-of-interest

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Dino Ltd commences operation on 1 January, 2018. In 2017 Dino Ltd explores three areas and incurs these costs:

Exploration and evaluation expenditure

($m)

Sunshine 35

Moonlight 18

Planet 22

In 2019 oil is discovered at Sunshine Site. Moonlight Site is abandoned. Planet Site has not yet reached a stage that permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in the area of interest are continuing. In relation to the exploration and evaluation expenditures incurred at Sunshine Site and Planet Site, 70% of the expenditures related to property, plant and equipment, and the balance relates to intangible assets.

Problem 1: Write down the essential journal entries using the area-of-interest method to account for the above transactions.

Reference no: EM132975404

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