User Account

All Pages

Prepare journal entries required for the gas station

Assignment Help Accounting Basics
Reference no: EM132703964

Question - Harvey Ltd. acquired a gas station on Oct. 1, 2020, at a cost of $800,000 and expects to operate the facility for 5 years. After the 5 years, the company is required by provincial laws to demolish the gas station and decontaminate and dismantle the underground gas storage tanks. It is estimated that the job will cost $128,000 at that time. Harvey follows ASPE and has a December 31 year end.

(1) Harvey has an effective interest rate of 5%. Prepare the journal entries to record the acquisition of the gas statin and the accrual for the asset retirement obligation for the gas station on Oct. 1, 2020. (Use present value factors in the attached table for calculations. Do not use a financial calculator.)

(2) Prepare journal entries required for the gas station and the asset retirement obligation at December 31, 2020. Harvey uses straight-line depreciation. The estimated residual value of the gas station is zero.

(3) Calculate accretion expense and the beginning and ending balances of asset retirement obligation (ARO) for each of the 5 12-month periods after the acquisition of the gas station.

(4) On Oct. 2, 2025, Harvey pays a contractor $150,400 to demolish the gas station and decontaminate and dismantle the underground gas tanks. Prepare the journal entry for the settlement of the asset retirement obligation.

Reference no: EM132703964

Questions Cloud

Explain the psychological ethics for legal purposes : In your opinion, could there ever be a time in which you might intentionally compromise psychological ethics for legal purposes? Please explain your position.
How much will she have at the end of the years : She will be making the investments at the beginning of each year. How much will she have at the end of the 5 years
Why studying building orientation is so important : Do you agree that LEED is difficult and expensive for individual homeowners and smaller noncommercial projects? Present your arguments.
Discuss the benefits of evaluating a workplace : Based on what you have learned in Weeks 1 through 4, and considering assignment Parts I through IV, discuss the benefits of evaluating a workplace through.
Prepare journal entries required for the gas station : Prepare journal entries required for the gas station and the asset retirement obligation at December 31, 2020. Harvey uses straight-line depreciation
What guiding principles and tools are used by psychologists : Compare the legal definition of insanity with the psychological concept of mentally ill. What guiding principles and tools are used by psychologists.
Explain immune system of a horse and a human : What are the differences between the immune system of a horse and a human? Please give 3 differences with explanation.
Population microevolution an extrapolation of the data : Is this population's microevolution an extrapolation of the data or a contradiction to the Genesis account of creation? Why or why not?
What is the project scheduling : What is the Project Scheduling? List five sports-related products that you think should be designed to make playing sports more fun ?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd