Prepare the necessary calculations and journal entries

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Reference no: EM132806397

During the reporting period ending 30 June 2020 Bonanza Mining Ltd conducted CSG operations in Tara, QLD. They spent $210 000 000 in the process and expected the useful life of operations to run for 10 years at which they time they are responsible to fully restore the area to its former agriculture status by dismantling wells and paying for restoration for the environment. After consulting engineers and environmentalists as well as the local community groups ABW estimates restoration will cost $60 000 000. Assume inflation will run at 3%. The rate on 10-year government bonds is 4.5%.

Problem 1: Prepare the necessary calculations and journal entries for 30 June 2020, 30 June 2021 and 30 June 2022. Ignore depreciation.

Reference no: EM132806397

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