Lu Corp. erects and places into service an offshore oil platform on January 1, 2011, at a cost of $10 million. Lu is legally required to dismantle and remove the platform at the end of its nine-year useful life. Lu estimates that it will cost $1 million to dismantle and remove the platform at the end of its useful life and that the discount rate to be used should be 8%. Prepare the entry to record the asset retirement obligation.
Answer to relevant QuestionsRefer to the data for Lu Corp. in BE13-17. Prepare any necessary adjusting entries that are associated with the asset retirement obligation and the asset retirement costs at December 31, 2011, assuming that Lu follows In ...Henry Corporation sells DVDs. The corporation also offers to sell its customers a two-year warranty contract as a separate service. During 2011, Henry sold 20,000 warranty contracts at $99 each. The corporation spent ...Takemoto Corporation borrowed $60,000 on November 1, 2011, by signing a $61,350, three-month, zero-interest-bearing note. Prepare Takemoto’s November 1, 2011 entry; the December 31, 2011 annual adjusting entry; and the ...The incomplete income statement of Perreault Corp. follows. The employee profit-sharing plan requires that 20% of all profits remaining after the deduction of the bonus and income taxes be distributed to the employees by the ...Timo operates a very busy roadside fruit and vegetable stand from May to October every year as part of his farming operation, which has a December 31 year end. Each time a customer purchases over $10 of produce, Timo gives ...
Post your question