Flint Corp. erected and placed into service an offshore oil platform on January 1, 2023, at a cost of $10 million. Flint is legally required to dismantle and remove the platform at the end of its eight-year useful life. Flint estimates that it will cost $1.0 million to dismantle and remove the platform at the end of its useful life and that the discount rate to use should be 10% . Using (a) factor Table A.2, (b) a financial calculator, or (c) Excel function PV, prepare the entry to record the asset retirement obligation. Assume that none of the $1.0 million cost relates to production. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Click here to view the factor table. Click here to view the factor table. Account Titles and Explanation Debit Credit

Flint Corp. erected and placed into service an offshore oil platform on January 1, 2023, at a cost of $10 million. Flint is legally required to dismantle and remove the platform at the end of its eight-year useful life. Flint estimates that it will cost $1.0 million to dismantle and remove the platform at the end of its useful life and that the discount rate to use should be 10% . Using (a) factor Table A.2, (b) a financial calculator, or (c) Excel function PV, prepare the entry to record the asset retirement obligation. Assume that none of the $1.0 million cost relates to production. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Click here to view the factor table. Click here to view the factor table. Account Titles and Explanation Debit Credit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Lifeline Biofuels bult an oil rig at a cost of $4.5 million that it places into service on the first day of the current year. The company estimates the oil rig will have a useful life of 20 years (with no salvage value), after which Federal regulations require that the oil rig must be dismantled and the land area restored. The expected fair value of this asset retirement project is $845,000. The present value of these asset retirement costs is $263,000 based on the 6% after - tax discount rate Under US. GAAP, what is the company's accretion expense for the first year? A. $42,250 OB. $15.780 OC. $13,150 OD. S0
On December 1, 2021, HP Corp. is contemplating to invest into a new equipment costing P2,500,000 plus an installation cost of P200,000 to replace its old equipment that has a book value of P400,000 and a remaining useful life of 4 years. The estimated useful life of the new equipment is 4 years and has a salvage value of P500,000. If the company will favor the replacement decisions, the old equipment can be sold for P150,000 but additional working capital investment must be made amounting to P400,000. However, the company must incur a repair cost of P180,000 to continuously use the old equipment. The annual cash operating costs of the old equipment is P4,000,000 while the annual cash operating cost of the new equipment is P2,400,00. At the end of the useful life, cost to remove the new equipment will amount to P100,000. The company uses a tax rate of 35%, requires a payback period is 2.5 years or less, and accepts a minimum accounting rate of return is 15%. Compute for the net…
Sum-of-the-year's-digits. Jon Seceda Furnace Corp. purchased machinery for $315,000 on May 1, 2020. It is estimated that it will have a useful life of 10 years, salvage value of $15,000, production of 240,000 units, and working hours of 25,000. During 2021, Seceda Corp. uses the machinery for 2,650 hours, and the machinery produces 25,500 units My understanding of the equation is (Cost-Salvage Value) x Depreciation Fraction = Depreciation Charge. My calculation: ($315,000-$15,000) x 10/55 = 54,545.45 Bartely's answer (which is correct): ($315,000-$15,000) x 10/55 x 4/12 = 18,181.81 ($315,000-$15,000) x 9/55 x 8/12 = 32,727.27 Sum-of-the-Years'-digits = 50,909.08 (add 18,181.81 and 32,727.27) My question is where does the fractions (4/12 and 8/12) come from?
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? $
in blasting and removing buildings, purchased and took delivery of a new c E10-8 On January 1, 2020, Murray Demolition, a Hamilton, Ontario, company specializing four years, at which time it should be able to be sold for $60,000. Murray Demoli- $140,000 plus HST on the truck, which is expected to be useful to the business for tion has always used the straight-line basis of calculating amortization. The new uses only the best and newest equipment on their worksites. The business spent truck to add to its growing fleet. Murray Demolition has a high-class reputation and dump owners want to see the amortization schedules for the straight-line, UOP. and D methods just to be sure this makes sense. The business expects the truck to he ful for 200,000 kilometres-60,000 kilometres in Year 1, 50,000 kilometres in eache Years 2 and 3, and 40,000 kilometres in Year 4. Is there a problem with continuing to use the straight-line method?
Gadot Company operates an oil platform at the Pacific Ocean. An oil platform was built by the Company at a cost of P25,000,0000 on January 1, 2011, the present value of expected restoration costs at that time was P5,000,000. The oil platform has an estimated useful life of 20 years, with no residual value. On December 31, 2020, the Company was offered P18,000,000 to sell the platform. The selling costs would be P2,500,0000. The value in use of the platform is P13,000,000. How much is the impairment loss for the year 2020? a. None b. 2,500,000 c. 2,000,000 d. 500,000
Getaway Inc. bought a machine on January 1, 2021 for $50,000. Getaway plans to keep the machine for 10 years. What is the machine's carrying value on June 30, 2023 assuming Gateway uses straight-line depreciation?
46. A new engine was installed by a textile plant at cost of P and projected to have a useful life of 15 years. At the end of its useful life, it is estimated to have a salvage value of P30,000. The capitalized cost is P350,000. Determine the first cost P if interest is 18% compounded annually.
8
i need the answer quickly
Please do not give image format
Required information [The following information applies to the questions displayed below.] On January 1, 2024, the Excel Delivery Company purchased a delivery van for $52,000. At the end of its five-year service life, it is estimated that the van will be worth $1,000. During the five-year period, the company expects to drive the van 135,000 miles. Required: Calculate annual depreciation for the five-year life of the van using each of the following methods. 1. Straight line. Straight-line 2. Double-declining balance. Note: Round your answers to the nearest whole dollar amount. Year 2024 2025 2026 2027 2028 Total Year 2024 Depreciation 2025 2026 2027 2028 Total $ 3. Units of production using miles driven as a measure of output, and the following actual mileage: Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Miles 0 27,000 29,000 30,000 25,000 26,000 per year Depreciation $ 0