Prepare the journal entries to record the acquisition of

Reference no: EM13480284

On January 1, 2014, Offshore Corporation erected a drilling platform at a cost of $5,420,142. Offshore is legally required to dismantle and remove the platform at the end of its 6 year useful life, at an estimated cost of $943,065. Offshore estimates that 70% of the cost of dismantling and removing the platform is caused by acquiring the asset itself, and that the remaining 30% of the cost is caused by using the platform in production. The present value of the increase in asset retirement obligation related to the production of oil in 2014 and 2015 was $32,092 and $34,659, respectively. The estimated residual value of the drilling platform is zero, and Offshore uses straight-line depreciation. Offshore prepares financial statements in accordance with IFRS.

Prepare the journal entries to record the acquisition of the drilling platform, and the asset retirement obligation for the platform, on January 1, 2014. An appropriate interest or discount rate is 8%.

Prepare any journal entries required for the platform and the asset retirement obligation at December 31, 2014.

Reference no: EM13480284

Questions Cloud

It is found that when a particular 4-sided die is rolled a : it is found that when a particular 4-sided die is rolled a 1 occurs 22.8 of the time a 2 occurs 25.3 of the time a 3

Explain how understanding of a clients business can : explain how understanding of a clients business can provide value-added services that an auditor could use to assist a

Is company cs cash flow statement cause for any concern on : the following are summary cash flow statements for three roughly equal sized companies millionsnet cash flows from

What are the differences between a direct cost and an : what are the differences between a direct cost and an indirect cost? which is the more difficult cost to track? why?

Prepare the journal entries to record the acquisition of : on january 1 2014 offshore corporation erected a drilling platform at a cost of 5420142. offshore is legally required

Compute the price-earnings ratio for each of these four : compute the price-earnings ratio for each of these four separate companies. which stock might an analyst like

What is responsibility accounting is it used at your : what is responsibility accounting? is it used at your current or former place of employment and if not would it work?

Which of the following is not a valid quantitative measure : 1 as a general rule it is desirable to finance the permanent assets including permanent current assets with long-term

On january 1 2012 irwin animation sold a truck to peete : 1.garcia corporation purchased a truck by issuing an 95200 4-yearnbspnbspzero-interest-bearing note to equinox inc. the

User Account

All Pages