On January 1, 2014, Peter Company purchased an oil tanker depot at a cost of 8,000,000. The entity is expected to operate the depot for 5 years after which it is legally required to dismantle the depot and remove the underground storage tanks. The oil tanker depot is depreciated using straight line with no residual value. It is reliably estimated that the of decommissioning the depot will amount to 1,500,000. The appropriate discount rate is 10%. On December 31, 2018, after 5 years of operating the depot, the entity paid a demolition entity to dismantle the depot at a price of 1, 700,000. What is the amount of gain or loss to be included in the Income statement for the period ended December 31, 2018?
On January 1, 2014, Peter Company purchased an oil tanker depot at a cost of 8,000,000. The entity is expected to operate the depot for 5 years after which it is legally required to dismantle the depot and remove the underground storage tanks. The oil tanker depot is depreciated using straight line with no residual value. It is reliably estimated that the of decommissioning the depot will amount to 1,500,000. The appropriate discount rate is 10%. On December 31, 2018, after 5 years of operating the depot, the entity paid a demolition entity to dismantle the depot at a price of 1, 700,000. What is the amount of gain or loss to be included in the Income statement for the period ended December 31, 2018?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2014, Peter Company purchased an oil tanker depot at a cost of 8,000,000. The entity is expected to operate the depot for 5 years after which it is legally required to dismantle the depot and remove the underground storage tanks. The oil tanker depot is
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