A company buys an oil rig for P1,200,000 on January 1, 2020. The life of the rig is 12 years and the expected cost to dismantle the rig at the end of 12 years is P300,000 (present value factor of 1, 12% for 12 years is 0.2567). 12% is an appropriate interest rate for this company. What is the total expense should be recorded for 2020 as a result of these events?

A company buys an oil rig for P1,200,000 on January 1, 2020. The life of the rig is 12 years and the expected cost to dismantle the rig at the end of 12 years is P300,000 (present value factor of 1, 12% for 12 years is 0.2567). 12% is an appropriate interest rate for this company. What is the total expense should be recorded for 2020 as a result of these events?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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