Asset Retirement Obligation Tin Mines International Ltd. discovered a new iron ore deposit, the Grouse Mine, and began production on January 1, 2020. The province requires mining companies to return the land to its natural state at the end of mining activity. Tin Mines International estimates that it will operate the mine for 25 years, at which time it will cost $25,000,000 for the land restoration project. Tin Mines International uses an 8% discount rate, and follows ASPE. Instructions a) b) Record any obligation for land restoration at January 1, 2020. Record any entry required related to this obligation at December 31, 2020.

Asset Retirement Obligation Tin Mines International Ltd. discovered a new iron ore deposit, the Grouse Mine, and began production on January 1, 2020. The province requires mining companies to return the land to its natural state at the end of mining activity. Tin Mines International estimates that it will operate the mine for 25 years, at which time it will cost $25,000,000 for the land restoration project. Tin Mines International uses an 8% discount rate, and follows ASPE. Instructions a) b) Record any obligation for land restoration at January 1, 2020. Record any entry required related to this obligation at December 31, 2020.

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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Data Company OAD purchases an amusement facility on June 1, 2021. The material and engineering costs amount to $34,500,000, fees and permits total $6,300,000, and taxes are 1,200,000 to build the facility. The facility is expected to last 30 years or 600 games. The residual value of the facility will be $12,000,000 at the end of its useful life. The estimated game use for the first three years is: 4 games in 2021, 10 games in 2022, and 20 games in 2023. 1.) What is the total cost of the Amusement Facility? $ 2.) What is the salvage value of the Amusement Facility? $ 3.) What is the depreciable base of the Amusement Facility? $
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