Question: Manufacturing Incorporated MI purchased land on 1 January 20X2 which

Manufacturing Incorporated (MI) purchased land on 1 January 20X2, which it started to operate as a gravel pit. The gravel pit will be operating for the next 20 years. At the end of the 20 years MI will be required to incur an estimated cost of $ 5 million to restore the land. This is required by government legislation. The interest rate that reflects the risks to MI is 8%.

1. Provide the journal entry for the restoration costs on 1 January 20X2.
2. Provide all required adjusting journal entries on 31 December 20X2.

View Solution:

Sale on SolutionInn
  • CreatedFebruary 17, 2015
  • Files Included
Post your question