Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Ore Body Corp. (OBC) runs an open-pit copper mine on land leased from the provincial government. OBC constructed several outbuildings on the mine site at

Ore Body Corp. (OBC) runs an open-pit copper mine on land leased from the provincial government. OBC constructed several outbuildings on the mine site at a total cost of $15 million, all of which were ready for use on January 1, 20X3. Pertinent details of OBCs operation follow: When OBC is finished mining, a term of the lease requires OBC to remove all buildings and remediate the land by creating a nature park. The estimated cost of removal and remediation is $8 million. OBC reports its net assets in accordance with IFRS. Its year end is December 31. OBC depreciates the buildings on a straight-line basis over the 10-year useful life of the mine. Their expected residual value is nil. OBC uses a discount rate of 6%, which is an appropriate rate for this type of obligation. What is the amount that OBC will report as an outbuilding asset, net, on its statement of financial position as at December 31, 20X3? a) $17,279,216 b) $17,520,442 c) $19,020,442 d) $19,467,158

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing A Practical Approach

Authors: Robyn Moroney, Fiona Campbell, Jane Hamilton, Valerie Warren

4th Canadian Edition

1119709490, 9781119709497

More Books

Students also viewed these Accounting questions

Question

Find r(t) if r'(t) = 2ti + 3t 2 j + t k and r(1) = i + j.

Answered: 1 week ago

Question

Does your message use defamatory language?

Answered: 1 week ago