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Biology Inc. developed a new gold mine in 2021 and is required by provincial law to restore the site to its previous condition once mining
Biology Inc. developed a new gold mine in 2021 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. Biology uses a 6% discount rate. To the nearest dollar, the entry to record the asset retirement obligation is
a. Restoration Expense 93,541 Asset Retirement Obligation 93,541
b. Restoration Expense 250,000 Asset Retirement Obligation 250,000
c. Gold Mine 5,000,000 Asset Retirement Obligation 5,000,000
d. Gold Mine 1,559,000 Asset Retirement Obligation 1,559,000
(is not option D)
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Fundamentals of Cost Accounting
Authors: William Lanen, Shannon Anderson, Michael Maher
4th edition
78025524, 978-0078025525
