detoxification facility for P9,000,000. On January 1, 2021, Camille Company purchased a gas The cost of cleaning up the routine contamination caused by detoxification facility for P9,000,000. che initial location of gas on the property is estimated to be P1,500,000. This cost will be incurred in 10 years when all of the existing stockpile of gas is detoxified and the facility is decommissioned. Additional contamination may occur in succeeding years that the facility is in operation. On January 1, 2023, additional contamination clean up cost is estimated at P200,000. The appropriate discount rate is 6%. The present value of 1 at 6% is 0.63 for 8 periods and 0.56 for 10 periods. On December 31, 2030, the entity paid a contractor an amount of P2,000,000 for the decommissioning of the detoxification facility. Required: 1. Prepare journal entries in 2021 in relation to the detoxification facility and the decommissioning liability. 2. Prepare journal entries in 2023 in relation to the detoxification facility and decommissioning liability. 3. Prepare journal entries on December 31, 2030 to record the derecognition of the detoxification facility and the settlement of the decommissioning liability.

detoxification facility for P9,000,000. On January 1, 2021, Camille Company purchased a gas The cost of cleaning up the routine contamination caused by detoxification facility for P9,000,000. che initial location of gas on the property is estimated to be P1,500,000. This cost will be incurred in 10 years when all of the existing stockpile of gas is detoxified and the facility is decommissioned. Additional contamination may occur in succeeding years that the facility is in operation. On January 1, 2023, additional contamination clean up cost is estimated at P200,000. The appropriate discount rate is 6%. The present value of 1 at 6% is 0.63 for 8 periods and 0.56 for 10 periods. On December 31, 2030, the entity paid a contractor an amount of P2,000,000 for the decommissioning of the detoxification facility. Required: 1. Prepare journal entries in 2021 in relation to the detoxification facility and the decommissioning liability. 2. Prepare journal entries in 2023 in relation to the detoxification facility and decommissioning liability. 3. Prepare journal entries on December 31, 2030 to record the derecognition of the detoxification facility and the settlement of the decommissioning liability.

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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