Determine the amount that should be capitalized

Reference no: EM131957771

Problem

Pharoah Products Limited leases property on which copper has been discovered. The lease provides for an immediate payment of $471,920 to the lessor before drilling has begun and an annual rental of $54,940. In addition, the lessee is responsible for cleaning up the waste and debris from drilling and for the costs associated with reconditioning the land for farming when the mine is abandoned. It is estimated that the legal obligation related to cleanup and reconditioning has a present value of $45,820. Pharoah Products has publicly pledged an additional $29,600 (present value) to reclaim the area surrounding the mine. Pharoah Products prepares financial statements in accordance with IFRS. Determine the amount that should be capitalized in the Mineral Resources asset account as a result of the lease agreement. Determine the amount that should be capitalized in the Mineral Resources asset account as a result of the lease agreement. Assume Pharoah Products prepares financial statements in accordance with ASPE.

Reference no: EM131957771

Questions Cloud

Compute the companywide break-even point in dollar sales : Compute the companywide break-even point in dollar sales. Compute the break-even point in dollar sales for the North region.

How would you know if your results are positive or negative : What is the P/E Ratio and Dividend Yield? The closing price for the day $206.58. How would you know if your results are positive or negative?

What effect would the purchase of the new machine have : What effect would the purchase of the new machine have on Petoski's break-even point in units?

Calculate peytons return on assets and profit margin : Peyton's Palace has net income of $14.4 million on sales revenue of $124 million. Calculate Peyton's return on assets, profit margin, and asset turnover ratios.

Determine the amount that should be capitalized : Determine the amount that should be capitalized in the Mineral Resources asset account as a result of the lease agreement.

What is the likely post-merger bargaining outcome : Pharmaceutical Benefits Managers or PBMs are intermediaries. Now suppose the two drug companies merge. What is the likely post-merger bargaining outcome?

Define decision rules : Phil, a corporate controller, was preparing a comprehensive presentation of his firm's financial statements for the board of directors. Define decision rules.

Prepare a schedule of distribution of income sssumimg : Prepare a schedule of distribution of income sssumimg that there was a net loss of 30,000 in 2016.

What is the maximum amount of deductible contributions : Assuming Phil's wages were $27,000 and Linda's wages were $18,500. What is the maximum amount of their deductible contributions to a traditional IRA for 2016?

User Account

All Pages