In 2023 Collingwood Ltd commenced operating a power generating facility in outback Australia. The company has a legal obligation to remediate the site when it closes the operation which is expected to be in 20 years' time. As at 30 June 2023 the best estimate to remediate the site (in 2043) is $10,000,000. 4 One year later the best estimate of remediating the site (in 19 years' time) is $15,000,000. The pre-tax rates that reflect current market assessments of the time value of money and he risks specific to the liability were 7% as at 30 June 2023 and 8% as at 30 June 2024. Provide the journal entries in relation to the above obligation for the years ending 0 June 2023 and 30 June 2024. Ensure narrations are shown for all journal entries.

In 2023 Collingwood Ltd commenced operating a power generating facility in outback Australia. The company has a legal obligation to remediate the site when it closes the operation which is expected to be in 20 years' time. As at 30 June 2023 the best estimate to remediate the site (in 2043) is $10,000,000. 4 One year later the best estimate of remediating the site (in 19 years' time) is $15,000,000. The pre-tax rates that reflect current market assessments of the time value of money and he risks specific to the liability were 7% as at 30 June 2023 and 8% as at 30 June 2024. Provide the journal entries in relation to the above obligation for the years ending 0 June 2023 and 30 June 2024. Ensure narrations are shown for all journal entries.

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Description: In 2023 Collingwood Ltd commenced operating a power generating facility in outbackAustralia. The company has a legal obligation to remediate the site when it closes theoperation which is expected to be in 20 years' time. As at 30 June 2023 the best

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 8P: At the beginning of 2020, Holden Companys controller asked you to prepare correcting entries for the...

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For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a seventeen-year remaining legal life was purchased for $850,000. The patent will be usable for another six years. B. A patent was acquired on a new tablet. The cost of the patent itself was only $12,000, but the market value of the patent is $150,000. The company expects to be able to use this patent for all twenty years of its life.
At the beginning of 2020, Holden Companys controller asked you to prepare correcting entries for the following three situations: 1. Machine X was purchased for 100,000 on January 1, 2015. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 45,000. The estimated residual value remains at 10,000, but the service life is now estimated to be 1 year longer than originally estimated. 2. Machine Y was purchased for 40,000 on January 1, 2018. It had an estimated residual value of 4,000 and an estimated service life of 8 years. It has been depreciated under the sum-of-the-years-digits method for 2 years. Now, the company has decided to change to the straight-line method. 3. Machine Z was purchased for 80,000 on January 1, 2019. Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value is 8,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry for each situation to record the depreciation for 2020. Ignore income taxes.
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