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On January 1, Year 1, Brown Mining Enterprises purchases an existing coal mine. Brown expects to operate the mine for four years, after which it

On January 1, Year 1, Brown Mining Enterprises purchases an existing coal mine. Brown expects to operate the mine for four years, after which it is legally required to dismantle the mine. Brown estimates that it will pay $500,000 at the beginning of Year 5 to dismantle the mine. What would be balance of the Asset Retirement Obligation (ARO) at the end of Year 2?

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