ABC Inc., a private company following ASPE developed a new gold mine during 2022 and is required by provincial law to restore the site to its previous condition once mining operations are completed. The company estimates that the mine will close in 20 years and that the land restoration will cost $ 5,000,000. ABC uses a 6% discount rate.

To the nearest dollar, the entry to record the asset retirement obligation is

Question 6Select one:

a.

d) Gold Mine............................................... 1,559,024

Asset Retirement Obligation................. 1,559,024

b.

Restoration Expense............................................................................ 93,541

Asset Retirement Obligation ............................ 93,541

c.

c) Gold Mine..................................................... 5,000,000

Asset Retirement Obligation........................ 5,000,000

d.

b) Restoration Expense....................................................... 250,000

Asset Retirement Obligation............................ 250,000