Please solve $($b$).$

Indigo Limited purchased an oil tanker depot on July $2,2023,$ at a cost of $$522,000$ and expects to operate the depot Indigo Limited purchased an oil tanker depot on July $2,2023,$ at a cost of $$522,000$ and expects to operate the depot

for $10$ years. After the $10$ years, Indigo is legally required to dismantle the depot and remove the underground storage

tanks. It is estimated that it will cost $$65,250$ to do this at the end of the depot's useful life. Indigo follows ASPE.

Click here to view the factor table.

Click here to view the factor table.

$($a$1)$

Your answer is correct.

Calculate the present value of the asset retirement obligation $($that is$,$ its fair value$)$ on the date of acquisition,

based on an effective interest rate of $6\%.($Round factor values to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and

final answer to $0$ decimal places, e$.$g$.5,275.)$

Present value of the asset retirement obligation

eTextbook and Media

List of Accounts

Your answer is correct.

Prepare the journal entries to record the acquisition of the depot and the accrual for the asset retirement

obligation for the depot on July $2,2023.$ Use $(1)$ factor Table A$\mathrm{.}2,(2)$ a financial calculator, or $(3)$ Excel function PV in

your calculations. $($Round factor values to $5$ decimal places, e$-$g$-1\mathrm{.}25124$ and final answers to $0$

decimal places, e$.$g$-5,275.$ Credit account titles are automatically indented when the amount is

entered. Do not indent manually. List all debit entries before credit entries. If no entry is

required, select $"$No Entry" for the account titles and enter $0$ for the amounts.$]$

Account Titles and Explanation

Credit

Oil Tanker Depot

$522000$

$($To record purchase of depot$)$

Oil Tanker Depot

Asset Retirement Obligation

$($To record asset retirement obligation$)$

for $10$ years. After the $10$ years, Indigo is legally required to dismantle the depot and remove the underground storage

tanks. It is estimated that it will cost $$65,250$ to do this at the end of the depot's useful life. Indigo follows ASPE.

Click here to view the factor table.

Click here to view the factor table.

$($a$1)$

Your answer is correct.

Calculate the present value of the asset retirement obligation $($that is$,$ its fair value$)$ on the date of acquisition,

based on an effective interest rate of $6\%.($Round factor values to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and

final answer to $0$ decimal places, e$.$g$.5,275.)$

Present value of the asset retirement obligation

eTextbook and Media

List of Accounts

Your answer is correct.

Prepare the journal entries to record the acquisition of the depot and the accrual for the asset retirement

obligation for the depot on July $2,2023.$ Use $(1)$ factor Table A$\mathrm{.}2,(2)$ a financial calculator, or $(3)$ Excel function PV in

your calculations. $($Round factor values to $5$ decimal places, e$-$g$-1\mathrm{.}25124$ and final answers to $0$

decimal places, e$.$g$-5,275.$ Credit account titles are automatically indented when the amount is

entered. Do not indent manually. List all debit entries before credit entries. If no entry is

required, select $"$No Entry" for the account titles and enter $0$ for the amounts.$]$

Account Titles and Explanation

Credit

Oil Tanker Depot

$522000$

$($To record purchase of depot$)$

Oil Tanker Depot

Asset Retirement Obligation

$($To record asset retirement obligation$)$