Provide dated journal entries to record acquisition of tanks

Assignment Help Accounting Basics

Reference no: EM132835339

Question - Spaigal Corp. installed new underground tanks at a service station site on January 1, 2020 at a cost of $330,000. The tanks had an expected useful life of 12 years with no residual value. Spaigal amortizes tanks using the straight-line method. At the time of acquisition, the expected future cost of removing and disposing of the tanks was $120,000. Spaigal's risk adjusted 12 year discount rate was 6% at the time of acquiring the tanks. Spaigal's year-end is December 31 and the company prepares annual financial statements.

Required - Provide dated journal entries to record

a) Acquisition of the tanks on January 1, 2020.

b) Adjustments for the year ended December 31, 2020.

c) Removing and disposing (nil proceeds) of the tanks on January 1, 2032, incurring costs of $114,300.

Reference no: EM132835339

Questions Cloud

What is the forward rate : The 90-day forward rate is quoted at a premium of 5.10 percent on the euro. What is the 90-day forward rate

How do us corporations influence the government : How do US corporations influence the government? Please specify in term of regulations. Use atleast 2 articles as a reference.

Explore the aspects of the paradigms : Nursing Paradigm represent a world view and general perspective on the complexities of the real world. The disciplined inquiry in the field of nursing is being.

What the accounting and tax implications are : What the accounting/tax implications are and what steps can be taken to address a reassessment.

Provide dated journal entries to record acquisition of tanks : The tanks had an expected useful life of 12 years with no residual value. Provide dated journal entries to record Acquisition of tanks

What is the interest income for that year : It accounted the investment as a financial asset at amortized cost. If on Nov. 30, 2021, ABC sold the investment, what is the interest income for that year?

What are the potential sources for the problems : Nurse Millie Adams is a nursing administrator at Good Care Hospital, a facility that serves as an educational training hospital. Nurse Adams has noticed.

Compute the dividends per share on each class of stock : Compute the dividends per share on each class of stock for each of the four years. Round all answers to two decimal places. If no dividends are paid

Determine the amount to be added to allowance for doubtful : Find the amount to be added to Allowance for Doubtful Accounts in each of the following cases and indicate the ending balance in each case.

User Account

All Pages