Crane Energy Company is erecting an oil platform off the coast of Texas. Crane is legally required to dismantle and remove the platform at the

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Crane Energy Company is erecting an oil platform off the coast of Texas. Crane is legally required to dismantle and remove the platform at the end of its

10 -

year useful life. Crane estimates dismantling and removal costs to be $

1920000 .

Based on a

7 %

discount rate, the fair value of the ARO is estimated to be $

976032 .

What amount would be recorded as accretion expense in the first year?

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