At the beginning of 2020, Bambis Barbells (Bambi) built a gym on leased property. Note the following:

• The lease agreement requires Bambi to return the leased property to its original state at the end of the five-year lease by dismantling the gym.
• Engineering reports commissioned by Bambi show that the best estimate of costs to settle the obligation in five years will equal $5,000. Bambi has determined the present value of the obligation to be $2,837.
• The companys risk free rate is 12%.
• The risk-adjusted market discount rate for this liability is 14%.
• Bambi follows ASPE.

What is the accretion expense for 2022 related to this ARO?

Question 9 options:

a)

$427

b)

$340

c)

$516

d)

$381