LO #1 - Question 2 - Asset Retirement Obligations (10 Marks) Radioactive Industries Inc., a public company following IFRS, purchased a nuclear power plant during 2021. The company is required by provincial law to decommission the plant at the end of the plant's useful life. Other information pertaining to the power plant follows: Estimated decommissioning cost $ 10,000,000 Useful life of the power plant (In years) 25 Discount rate used by Radioactive Industries 7% Purchase price of the plant on October 1, 2021 $ 100,000,000 Actual decommissioning cost on October 1, 2046 $ 10,200,000 Assume that the entire cost of decommissioning the plant is caused by the acquisition of the plant. Radioactive industries has a year end of November 30. Required: 1. Record the journal entries on October 1, 2021 for: (a) the purchase of the plant; and (b) the obligation to decommission the plant. (3 marks) 2. Record the adjusting Journal entry pertaining to the asset retirement obligation at the end of the 2021 fiscal year. (2.5 marks) 3. Record the adjusting Journal entry at the 2021 fiscal year end for depreciation of the plant Assume that Radioactive Industries uses the straight-line method of depreciation and that the plant does not have any estimated residual value at the end of its useful life (2.5 marks) 4. Record the Journal entry for the payment of the asset retirement obligation at the end of the plant's useful life. (2 marks)