Black Mountain Ski Resort has been granted a 20-year permit to develop and operate a snow skiing

Question:

Black Mountain Ski Resort has been granted a 20-year permit to develop and operate a snow skiing operation in a national park. After 20 years the site must be returned to its original condition. The roads may remain, as they can be used for fire prevention purposes. In the spring and summer before the ski hill opened, the following transactions and events occurred:
i. Installed three ski lifts for a total cost of $ 150,000,000
ii. Built a ski chalet for $70,000,000
iii. Removed trees and cleared the area for ski runs at a cost of $40,000,000
iv. Received $10,000,000 for the trees that were removed for the ski runs
v. Put in roads for a cost of $50,000,000
vi. Paved an area at the base of the mountain for a parking lot at a cost of $ 10,000,000
vii. Estimated that it would cost 520,000,000 to dismantle the ski lifts in 20 years. It is estimated that these lifts could be sold as scrap steel for $4,000,000. The chalet could be removed for a cost of $15,000,000. Reforesting the site would cost $5,000,000. Removing the parking lot will cost $3,000,000.
Required:
a. Prepare journal entries to record transactions i. to vi.
b. Prepare a journal entry to record transaction vii. Assume all these costs will be set up in a single account called “site restoration cost.” Assume a 6% discount rate.
c. Record all year-end journal entries for the above items for the first year of operations. The company used the straight-line method to record depreciation for all assets.
d. Prepare only those journal entries for the second and third year of operations which would be different from those completed in (c).
e. Prepare the presentation of all the accounts involved in this question for the end of the third year of operations.
f. Assume at the end of the project the actual net cost of restoring the site is 39,000,000, as originally estimated. Prepare the journal entry to record the payment of these costs.
g. What would be the total expenses associated with the site restoration in the first and second years of operations? In the last (twentieth) year? Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...