Prepare the journal book, Financial Accounting

Assignment Help:

On January 1, 2014, Offshore Corporation erected a drilling platform at a cost of $5,420,142. Offshore is legally required to dismantle and remove the platform at the end of its 6 year useful life, at an estimated cost of $943,065. Offshore estimates that 70% of the cost of dismantling and removing the platform is caused by acquiring the asset itself, and that the remaining 30% of the cost is caused by using the platform in production. The present value of the increase in asset retirement obligation related to the production of oil in 2014 and 2015 was $32,092 and $34,659, respectively. The estimated residual value of the drilling platform is zero, and Offshore uses straight-line depreciation. Offshore prepares financial statements in accordance with IFRS.


Prepare the journal entries to record the acquisition of the drilling platform, and the asset retirement obligation for the platform, on January 1, 2014. An appropriate interest or discount rate is 8%.
Prepare any journal entries required for the platform and the asset retirement obligation at December 31, 2014

 


Related Discussions:- Prepare the journal book

Money, if you inherited 45,000 today and invested all of it in a security t...

if you inherited 45,000 today and invested all of it in a security that paid a 7 percent rate of return how much would you have in 25 years

Evaluate equivalent annual cost, Q. Evaluate Equivalent annual cost? Th...

Q. Evaluate Equivalent annual cost? There are a number of techniques to answering this question and two are presented. The first difficulty is in deciding which broad approach

Leverage, Evaluate the importance of leverage in financial management of a ...

Evaluate the importance of leverage in financial management of a small scale company

Balance sheet, Is there two type of way to do balance sheet?

Is there two type of way to do balance sheet?

VAT SYSTEM, RECOMENDATION REGARDING THE CURRENT SOUTH AFRICAN VAT SYSTEM

RECOMENDATION REGARDING THE CURRENT SOUTH AFRICAN VAT SYSTEM

Participation of employees in management, Q. Participation of Employees in ...

Q. Participation of Employees in Management? To facilitate meaningful and effective participation of workers in the management process it was decided in March 1994 that the Cor

Sinking fund factor, Assume that you are interested in understanding how mu...

Assume that you are interested in understanding how much must be saved regularly over a period of time in order that at the ending of the period you have a particular amount. To an

Illustration of marked up by an additional amount, Illustration of marked u...

Illustration of marked up by an additional amount E Limited sent goods to its branch in Thika invoiced at selling price, which was cost plus 505 of cost.  On 1st July 20X2, the

the rate of interest on the gold is too high or too low, Suppose you are ...

Suppose you are a financial manager of Yuen Cheong Manufacturng Company. Due to the rising demand of product X, Yuen Cheong Manufacturng Company decides to open a new production pl

Maturity risk premium , The real risk-free rate is 2%. Inflation is expecte...

The real risk-free rate is 2%. Inflation is expected to be 2% this year and 5% during the next 2 years. Suppose that the maturity risk premium is zero. What is the yield on 2-ye

Write Your Message!

Captcha
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