Products company purchases an oil tanker

Assignment Help Financial Accounting

Reference no: EM13922406

l Products Company purchases an oil tanker depot on January 1, 2014, at a cost of $606,000. Oil Products expects to operate the depot for 10 years, at which time it is legally required to dismantle the depot and remove the underground storage tanks. It is estimated that it will cost $56,200 to dismantle the depot and remove the tanks at the end of the depot's useful life.Prepare the journal entries to record the depot (considered a plant asset) and the asset retirement obligation for the depot on January 1, 2014. Based on an effective-interest rate of 6%, the present value of the asset retirement obligation on January 1, 2014, is $31,382.

Reference no: EM13922406

Questions Cloud

Swamp foxs estimated sales : Q1. What is Swamp Fox's estimated sales in units for next year? A. 41,485 pairs. B. 38,300 pairs. C. 40,000 pairs. D. 40,685 pairs. E. Some other amount.

Prepare a consolidated income statement : Akron, Inc., owns all outstanding stock of Toledo Corporation. Amortization expense of $15,000 per year for patented technology resulted from the original acquisition. Prepare a consolidated income statement for the year ending December 31, 2015

Appropriate criteria for strategic planning : Establishing Metrics. Your text explains why it is important to select the appropriate criteria for strategic planning. Part of this process is establishing metrics to measure the progressive success of the strategic plan. Choose and discuss two m..

Problem regarding the computerized inventory system : Jorge Alvarez, the manager of the bookstore that your systems analysis team has been working with to build a computerized inventory system, thinks that one of your team members is making a nuisance of himself by asking him extremely detailed quest..

Products company purchases an oil tanker : Products Company purchases an oil tanker depot on January 1, 2014, at a cost of $606,000. Oil Products expects to operate the depot for 10 years, at which time it is legally required to dismantle the depot and remove the underground storage tanks

Strategic direction of the company rests with the ceo : Ultimate responsibility for the strategic direction of the company rests with the CEO. Which of the following statements is not true about operational planning?

Legal aspects of us health care system administration : Prevailing wisdom reinforces the fact that working in U.S. health care administration in the 21st Century requires knowledge of the various aspects of health laws as they apply to dealing with medical professionals.

Budgeted statement of cash flows : Use the budgeted statement of cash flows prepared in Requirement 3 to determine the Cash balance.

What have been done to stop this unsafe surge in valuation : Suddenly, the overpriced giants crashed. Individual investors lost millions and the NASDAQ (the stock exchange for most Internet companies) came tumbling down. What happened? Why did it happen? What could have been done to stop this unsafe surge i..

User Account

All Pages