Calaf’s Drillers erects and places into service an off-shore oil platform on January 1, 2018, at a cost of $10,000,000. Calaf is legally required to dismantle and remove the platform at the end of its useful life in 10 years. Calaf estimates it will cost $1,000,000 to dismantle and remove the platform at the end of its useful life in 10 years. (The fair value at January 1, 2018, of the dismantle and removal costs is $450,000.) Prepare the entry to record the asset retirement obligation.

Q: On January 1, 2019, Minas Company purchased a mining site in the mountains for the extraction of…

A: Decommission liability means the amount of money that needs to spent on return of a developed site…

Q: Oil Products Company purchases an oil tanker depot on January 1, 2020, at a cost of $600,000. Oil…

A: a. Prepare the journal entries to record the depot and the asset retirement obligation for the depot…

Q: In 2018, Titus paid #6,000,000 to purchase land containing a total estimated 160,000 tons of…

A: Depletion rate per ton= (Initial purchase amount - salvage value] / capacity of extraction of…

Q: On January 1, 2019, a company completed construction of a nuclear power plant. The total cost of the…

A: As per our protocol we provide solution to the one question or the first three sub-parts but you…

Q: Bassinger Company purchases an oil tanker depot on January 1, 2022, at a cost of $600,000. Bassinger…

A: Journal entry is the book of original entry where first transactions are recorded in the books of…

Q: Pete’s Petroleum, Inc., an SEC registrant with a calendar year-end, is in the business of…

A: 1. Expected Future Expenditure                   Expenditure Probability Amount…

Q: Larkspur Mining Company purchased land on February 1, 2017, at a cost of $1,210,800. It estimated…

A: (a)

Q: Yernar uses special plastic wrapping equipment in its shipping business. The equipment was purchased…

A: Hey, since there are multiple requirements posted, we will answer first two requirement. If you want…

Q: On March 31, 2021, M. Belotti purchased the right to remove gravel from an old rock quarry. The…

A: Belotti would record depeltion in 2021 = (Cost of the quarry rights /  Estimated salable rock) x…

Q: On January 2, 2020, KENNYInc. made a test of impairment on one of the buildings carried as plant…

A: After transfer ,rule of new IAS applies.

Q: On July 4, 2020, ZY Company purchased the mineral rights to a granite deposit for 2,400,000. It is…

A: The depletion expense is charged on minerals with extraction and minerals sold during the period.

Q: On July 1, 2020, FREESIA Company purchased the rights to a mine for ₱13,200,000, of which ₱1,200,000…

A: Depreciation is charged to record reduction in value of asset over the period of time.

Q: On January 2, 2019, Jillian Company made a test of impairment on one of its buildings carried as…

A: Revaluation surplus is disclosed in the equity section of the company’s statement of financial…

Q: 4 On January 1, 2020, an Oil Company erected an oil platform in the Gulf of KSA. Oil Company…

A:

Q: in 2020, Tableta company paid P4,000,000 to purchase a land containing a total estimated 160,000…

A: Annual depreciation= (cost of the assets  - residual value) / life of the assets = (P1,500,000-0) /…

Q: How much is the carrying value of the overpass as of December 31, 2021 assuming ABC used the…

A: Given Cost of overpass = 25000000 Life = 20years  Depreciation per year = 25000000/20 = 12500000

Q: On July 4, 2020, Wyoming Mining Company purchased the mineral rights to a granite deposit for…

A: Assets used over the years will face a depreciation each year which refers to the reduction in the…

Q: Alcide Mining Company purchased land on February 1, 2020, at a cost of $1,190,000. It estimated that…

A: a. Compute the per unit material cost.

Q: Monty Company purchases an oil tanker depot on January 1, 2020, at a cost of $ 552,300. Monty…

A: A journal entry is a form of accounting entry that is used to report a business transaction in a…

Q: Nash Mining Company purchased land on February 1, 2020, at a cost of $ 914,300. It estimated that a…

A:

Q: Crane Company purchases an oil tanker depot on January 1, 2020, at a cost of $639,700. Crane expects…

A: Machine or fixed assets means the asset which is used by company for many years to come for the…

Q: Calaf’s Drillers erects and places into service an off-shore oil platform on January 1, 2021, at a…

A:

Q: On January 1, 2021, Stanford Company purchased a mining site that will have to be restored to…

A: The answer is stated below:

Q: Calculate the equipment total cost at acquisition. The equipment was sold on December 31, 2023 for…

A: According to IAS 16 ( Property, Plant and Equipment ) any items of fixed asset can be capitalized if…

Q: Questions: What is the depletion for 2020? * What is the depreciation for 2020? *

A: Tangible assets are depreciated where as intangible assets/ rights are depleted over the useful…

Q: During 2018, Sandhill Company purchased a building site for its proposed research and development…

A: Income statement is a statement prepared to calculate the net income of a company after deducting…

Q: eight years. However, after all the resources are removed, the equipment will be of no use and will…

A: Depreciatioin is charged to record reductiion in value of asset over the period of time.…

Q: Crane Company purchases an oil tanker depot on January 1, 2020, at a cost of $639,700. Crane expects…

A: Solution:- Preparation of the journal entries to record the depot and the asset retirement…

Q: houses and other fixed installations are constructed at a cost of P8,000,000 and such expenditures…

A: Every natural resource will lose out its value over the period of time. Depletion is being charged…

Q: On April 20, 2020, Wilhamette Incorporated purchased the right to remove timber from a 20,000-acre…

A: Any right purchased which will be used in coming years is a intangible assets which is to be…

Q: During 2018, Sandhill Company purchased a building site for its proposed research and development…

A: A) Income Statement for 2020.

Q: Hardflex Inc. bought a building for production of XYZ product on June 30, 2017 costing P15,000,000…

A: First, the carrying value of the asset as on 31st December 2018 needs to be determined. Book value…

Q: On January 1,2015, Rekto Corporation acquired a building at a cost of $22,000,000. The building has…

A: Annual depreciation = (Cost of the assets - residual value)/ life of the assets = (P22,000,000 -…

Q: Crane Company purchases an oil tanker depot on January 1, 2020, at a cost of $639,700. Crane expects…

A: Loss on Asset retirement obligation's settlement = Amount paid - Estimated Asset retirement…

Q: On January 1, 2022, Proton, Inc. purchased a patent giving it exclusive rights to manufacture a new…

A:

Q: Your client, Hazelton Mining, recently entered Into an agreement to obtain the rights to operate a…

A: Working note:

Q: Lifeline Biofuels built an oil rig at a cost of $4.5 million that it places into service on the…

A: Accretion Expense: In accounting, accrual is the periodic acknowledgment of an expenditure that is…

Q: n July 1, 2020, FREESIA Company purchased the rights to a mine for ₱13,200,000, of which ₱1,200,000…

A: Solutions: 1) Depletion is charged in books in order to record reduction in value of natural…

Q: On June 30, 2021, Rosetta Granite purchased equipment for $120,000. The estimated useful life of the…

A: 1. Calculate depreciation for 2021 and 2022 applying the typical U.S. GAAP treatment:

Q: Headland Mining Company purchased land on February 1, 2020, at a cost of $939,500. It estimated that…

A: Total cost of land = Cost of land+Restoration obligation+Development cost-Resale value of the…

Q: During 2018, Concord Tools Ltd., a Canadian public company, purchased a building site for its…

A: As per GAAP, R&D costs are written-off in the same period irrespective of future benefit.

Q: Tamarisk Mining Company purchased land on February 1, 2020, at a cost of $945,100. It estimated that…

A: We have the following information: Tamarisk Mining Company purchased land on February 1, 2020, at a…

Q: On March 31, 2021, M. Belotti purchased the right to remove gravel from an old rock quarry. The…

A: Depletion is the reduction in value of natural resources over the period of time. This is recorded…

Q: Oil Products Company purchases an oil tanker depot on January 1, 2020, at a cost of $2,400,000. Oil…

A: Journal entry: Journal entry is the book of original entry where first transactions are recorded in…

Q: Tamarisk Mining Company purchased land on February 1, 2020, at a cost of $ 914,300. It estimated…

A: Cost Per Unit: It is calculated by taking into account two elements - variable cost and fixed cost -…

Q: Al Hamd drillers erects and places into service an off-shore oil platform on January1, 2018, at a…

A: Journal Entry:   It is a systematic record of a financial transaction of an organisation recorded in…

Q: On July 1, 2020, FREESIA Company purchased the rights to a mine for ₱13,200,000, of which ₱1,200,000…

A: Depletion is charged in books in order to record reduction in value of natural resources over the…

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.