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..

Reviews

Write a Review

Financial Accounting Questions & Answers

  Primary comparative financial statements

Based upon your analysis in part a, does teh company's liquidity appear to have increased or decreased during the most recent fiscal year?

  Prepare an extract of the income statement

Prepare an extract of the Income Statement to show how Gross Profit would be calculated for the year ended 31st December, under a periodic system using the First in First Out (FIFO) Valuation Method.

  Is it good or bad for a retail store to have large inventory

Is it good or bad for a retail store to have a large inventory? Why is misstatement of inventory one of the most common means of financial statement fraud?

  Manufactures special chromed parts

Custom Chrome Inc. manufactures special chromed parts made to order and specifications of the customer. It has two production departments, Stamping and PLating, and two service departments, Power and Maintenance.

  The cost of goods manufactured schedule

The cost of goods manufactured schedule is used to calcualte the cost of producing products for a period of time. The cost of goods manufactured amount is transferred to the finished goods inventory account during the period and is used in calculatin..

  Preparation of schedule of cost of goods manufactured and

preparation of schedule of cost of goods manufactured and cost of goods sold.hurwitz corporation had the following

  What is journal entry to record the purchase

Jeremiah paid the $2.5 million to acquire the raw materials when the raw materials were only worth $2.2 million. Assume that the purchase commitment was properly recorded. What is the journal entry to record the purchase?

  Show the entry in the investment trust fund

On January 1, Forrester County is holding investments for Tinsel Town valued at $800,000 in an investment pool, accounted for in an investment trust fund. On January 1, Valley School District invests $2,000,000 in the pool. Earnings on pooled investm..

  Computation of contribution margin ratio

Computation of contribution margin Ratio, BEP, and margin of Safety and Find Aunt Pitty's breakeven level of sales revenues and determine auto Pitty's Margin of Safety in the most recent year?

  What is the change in profit in both the short and long run

The income statement is available below. What is the change in profit in both the short run and long run by dropping intake valves from their product line?

  What actions should company take

The mailing of ken ‘s checks continued for the next four weekly paydays. It wasn’t until the monthly payroll reports were sent to Ken’s supervisor that the error was detected. Ken refused to return the four extra checks. What actions should the co..

  Calculate the firms total operating cycle

Calculate the firms total operating cycle for 2005 and 2006 and what type of working capital restructuring can the firm do to turn around its performance? What other types of asset restructuring might the firm consider?

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!

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