Blue Spruce Corp. erected and placed into service an offshore oil platform on January 1, 2023, at a cost of $11 million Blue Spruce is legally required to dismantle and remove the platform at the end of its eight-year useful life. Blue Spruce estimates that it will cost $1.1 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 $1.1 million cost relates to production. (Round factor values to 5 decimal places, eg 1.25124 and final answer to 0 decimal places, eg. 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)
Blue Spruce Corp. erected and placed into service an offshore oil platform on January 1, 2023, at a cost of $11 million Blue Spruce is legally required to dismantle and remove the platform at the end of its eight-year useful life. Blue Spruce estimates that it will cost $1.1 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 $1.1 million cost relates to production. (Round factor values to 5 decimal places, eg 1.25124 and final answer to 0 decimal places, eg. 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)
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
10th Edition
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter12: Cash Flow Estimation And Risk Analysis
Section: Chapter Questions
Problem 10P: Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6...
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Transcribed Image Text:Blue Spruce Corp. erected and placed into service an offshore oil platform on January 1, 2023, at a cost of $11 million Blue Spruce is
legally required to dismantle and remove the platform at the end of its eight-year useful life. Blue Spruce estimates that it will cost
$1.1 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 $1.1 million cost relates to production (Round factor values to 5 decimal places, eg 1.25124 and final answer to 0 decimal
places, eg. 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 O for the amounts)
Click here to view the factor table.
Click here to view the factor table.
Account Titles and Explanation
Drilling Platform
Asset Retirement Obligation
eTextbook and Media
Debit
Credit
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