FuelCo built a gas station with underground tanks and put them in service on January 1, 2016, at a cost of $500,000. The company estimates that the fuel tanks will have a useful life of 15 years and that the fair value of the costs to remove the fuel tanks will be 75,000 at the end of 15 years. Further, the company assumes a 10% discount rate and depreciates the fuel tanks using the straight-line method with no residual value. In the fifteenth year, FuelCo closes the gas station, incurring environmental remediation costs of $77,000 Requirements t Value of $1 table.) t Value of an Ordinary t Value of an Annuity What is the amount of the ARO that the company should recognize in the current year? What are the necessary journal entries for 2016? What are the necessary journal entries to remove the gas station from FuelCo's books? Read the requirements First, let's determine the fair value of the ARO as the present value of the future removal costs. (Abbreviations Used: ARO r, or a spreadsheet for Print Done your calculations. If using present and future value tables or the formula method, use factor amounts rounded to five d The fair value of the ARO as the present value of the future removal costs isS What are the necessary journal entries for 2016 FuelCo built a gas station with underground tanks and put them in service on January 1, 2016, at a cost of $500,000. The company estimates that the fuel tanks will have a useful life of 15 years and that the fair value of the costs to remove the fuel tanks will be 75,000 at the end of 15 years. Further, the company assumes a 10% discount rate and depreciates the fuel tanks using the straight-line method with no residual value. In the fifteenth year, FuelCo closes the gas station, incurring environmental remediation costs of $77,000 Requirements t Value of $1 table.) t Value of an Ordinary t Value of an Annuity What is the amount of the ARO that the company should recognize in the current year? What are the necessary journal entries for 2016? What are the necessary journal entries to remove the gas station from FuelCo's books? Read the requirements First, let's determine the fair value of the ARO as the present value of the future removal costs. (Abbreviations Used: ARO r, or a spreadsheet for Print Done your calculations. If using present and future value tables or the formula method, use factor amounts rounded to five d The fair value of the ARO as the present value of the future removal costs isS What are the necessary journal entries for 2016
