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CONCEPTS IN FED.TAX.,2020-W/ACCESS

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter11: Property Dispositions

Section: Chapter Questions

Problem 64P

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A company buys an oil rig for $2,400,000 on January 1, 2018. The life of the
rig is 10 years and the expected cost to dismantle the rig at the end of 10
years is $609,000 (present value at 12% is $196,080). 12% is an
appropriate interest rate for this company.
What expense should be recorded for 2018 as a result of these events?

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