Question

1. EX 11.01 Avet Retirement Obligation went obligation Chart of Accounts 2. EX.11.12 General Journal Next Level 3. EX.11.14 BLANKSHEET Instructor 4. EX 11.17.BLANKSHEET 2019, obesa Company purchased a coal mining site for 51.000.000 where the site to specified conditions at and cont at 175.000 Barbosa uses a 6%, doncourte der the form of the purchase pro b osa must that t he pathieu 20 ye cost of $125.000 Bars cuma entry necessary to record the purchase of the coal minne needed December t hread to the main vel What is the concept i on that under the accounting fu anasetrarement buton

Answer 1

Please find below table useful to compute desired results: -

ДА | Journal General 2 Date Account Titles and Explanation Debit Credit 3 Jan. 1 Coal Mining Site =D4+D5 Cash 1000000 Asset Retirement Obligation =125000*(1/1.06420) (to record acquisition of Plant Asset and asset retirement obligation) Dec. 31 Depreciation - Coal Mining Site =C3/20 Accumulated Depreciation - Coal Mining Site =C7 (to record depreciation Year 1) Dec. 31 Interest Expense =D5*6% 11 Asset Retirement Obligation =C10 12 (to record unwinding of Asset retirement obligation liability - Year 1) 9

End results would be as follows: -

B 2 3 А | C D Journal General Date Account Titles and Explanation Debit Credit Jan. 1 Coal Mining Site 1.038.975.59 Cash 1,000,000.00 Asset Retirement Obligation 38.975.59 (to record acquisition of Plant Asset and asset retirement obligation) Dec. 31 Depreciation - Coal Mining Site 51.948.78 Accumulated Depreciation - Coal Mining Site 51.948.78 (to record depreciation Year 1) Dec. 31 Interest Expense 2,338.54 Asset Retirement Obligation 2.338.54 (to record unwinding of Asset retirement obligation liability - Year 1) 11 12

On occasion when organization buys the assets there is commitment on some portion of organization to take care of sure for retirement of benefit and this retirement commitment is accounted for as risk at time of procurement which is recorded at present estimation of future commitment payable. At year end, organization would record money cost for the commitment payable which is added to the risk so that at end of the valuable existence of benefit the sum payable would be equivalent.

Asset Retirement Obligation is the commitment identified with resources which the organization needs to satisfy toward the finish of advantages life. Arrangement for Assets Retirement Obligation is made to meet these expenses to be brought about by the organization.