(a) Midnight Boil Ltd sells electricity generated from its nuclear power plant. Its managing director, Peter Polly, is not overly concerned about the environment but nevertheless knows that the company has a legal obligation to clean up the site in 20 years' time when the plant is shut on 30 June 2039. As at 30 June 2019, the best estimate to clean up the site (in 2039) is $10 500 000 One year later, on 30 June 2020, the best estimate at cleaning up the site (in 19 years' time) is still considered to be $10 500 000 The pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the liability were 7 per cent as at 30 June 2019 and 6 per cent as at 30 June 2020. Note: PV and Annuity tables are provided on the last page of this examination booklet Required: Provide the journal entries in relation to the above obligation for the years ending 30 June 2019 and 30 June 2020. Provide details of calculations. (6 marks) (b) Sandringham Mining Ltd has been mining in a particular coastal area. A requirement of the local Environmental Protection Authority is that the area be restored to a state that is beneficial to the local fauna. Required: Does a liability exist and, if so, when should a provision for restoration be recognised? (4 marks)